Wan Hai Lines Ltd.

Overview Key strengths Key risks Leading market position with 15%-20% market share and comprehensive port coverage in the intra-Asia container shipping market. High industry risk with chronic oversupply and intense competition. Satisfactory operating efficiency and cost control. Profitability and cash flow are susceptible to competition, cyclical swings, and high fluctuation in bunker fuel costs. Stronger intra-Asia trade demand is likely to support a more resilient operating performance for Wan Hai Lines Ltd. even during an industry downturn.Strengthened financial buffer underpinned by robust profitability. Relatively higher capital expenditure (capex) for self-owned fleet expansion over the next two to three years.Increasing exposure to competitive long-haul routes could invite volatility in profitability and higher leverage through business cycles. We forecast freight rates will

...We forecast freight rates will peak in 2022 and start normalizing later this year at the earliest from current all-time highs, provided the pandemic's impact on overall supply chains eases. Thereafter, as overall industry capacity gradually comes improves and vessels on order begin delivery from 2023, ocean tariffs might face a correction and subsequently stabilize at profitable levels that are likely above the pre-...

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