The rating on Wan Hai Lines Ltd. reflects the highly cyclical nature of the container shipping industry, its aggressive fleet expansion, and its slightly weak performance relative to the rating level. Counterbalancing factors include its strong market position in intra-Asia container routes, its good operating efficiency, and its adequate liquidity. Wan Hai is not immune from the current industry downturn, the deepest in the company's history, which led it to record losses in the fourth quarter of 2008. However, Wan Hai's swift withdrawal from the long-haul market, its leading position in the slightly more stable intra-Asia routes, and high operating efficiency have enabled the company to manage the downturn better and recover its profitability faster than its long-haul peers. As
