Wan Hai Lines Ltd.

The diversification of production facilities away from China to ASEAN--Association of Southeast Asian Nations--countries and robust trade growth in Asia support stronger demand growth on intra-Asia trade routes. We expect the container volume (or lifting volume) carried by Wan Hai to decline by slightly more than 10% in 2020 with particular shrinkage in the second and third quarters. Freight rates will come under pressure if the decline in trade volume worsens oversupply in the industry. Nonetheless, we believe the degree of decline in volume will be much milder for Wan Hai than for its global long-haul peers. Intra-Asia trade is likely to post stronger growth than the global market because of continued supply chain diversification and the lowering trade barriers

...Substantial declines in trading volume and freight rates could materially pressure Wan Hai's revenue in 2020. In our view, disruption to people flows and supply chains amid the COVID-19 outbreak could bring a slump in global transportation demand. The strict containment measures imposed by governments around the world could lead to significantly weaker global economic growth and end demand. Wan Hai is not immune from the significant industry headwinds, despite the company's relatively resilient and strong demand growth on its key intra-Asia routes. The diversification of production facilities away from China to ASEAN--Association of Southeast Asian Nations--countries and robust trade growth in Asia support stronger demand growth on intra-Asia trade routes. We expect the container volume (or lifting volume) carried by Wan Hai to decline by slightly more than 10% in 2020 with particular shrinkage in the second and third quarters. Freight rates will come under pressure if the decline in trade...

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