...November 27, 2024 Strengthened seaborne freight rates underpin strong performance in 2024. We now forecast Wan Hai's revenue to grow by 50%-55% in 2024, a material improvement over our earlier forecast of 15%-20%. Transpacific service lines are the main growth drivers, underpinned by nearly double freight rates compared with 2023 and the company's aggressive capacity additions on these routes. We also forecast the EBITDA margin will improve substantially to 35%-40% in 2024 from 10.5% in 2023. Persistent oversupply could weaken profitability in 2025. Capacity growth from megaships, mostly on long-haul routes, will continue to grow by 10%-15% in 2025 following a 15%-20% increase in 2024. Red Sea re-routing could partly absorb this increasing tonnage. Meanwhile, the slowing macroeconomy and geopolitical tension could weigh on global trade volume. Wan Hai's weaker cost structure and pricing power for transpacific services could constrain its profit margin, despite adjustments its services to...
