The ratings on Wan Hai Lines Ltd. reflect the company's largest market share in relatively stable intra-Asia container routes, high operational flexibility, and its significant leverage. Counterbalancing factors include the highly cyclical nature of the container shipping industry, rising fuel costs, and the company's somewhat limited operating scale. We assess Wan Hai's business risk profile and financial risk profile as "Fair" and "Significant". In our view, Wan Hai is not immune from the high cyclicality of the global container shipping industry. Sharply declining freight rates in long haul routes and rising fuel prices significantly weakened the company's profitability and cash flow protection measures in 2011. The company's net profit was New Taiwan dollar (NT$) 32 million in 2011, significantly down
