Leading market share in relatively stable intra-Asia container shipping market. Weakened profitability due to rapid decline in freight rates. Satisfactory trade route diversity and operating efficiency. High industry risk with chronic oversupply and intense competition. Modest debt leverage. Relatively conservative financial policy and expansion strategy compared with long-haul peers'. Strong liquidity. Significant volatility in the company's cash flow coverage ratios. The rating outlook on Wan Hai Lines Ltd. is negative, based on our view that the company's return on capital will remain below 10% over the next 12 months and the material risk that the company's profitability could drop further if rising competition from its long-haul peers weakens its competitive advantage in the intra-Asia market. This is based on our
