Financials

Companies

WHL and YMM Aug Revenue Add Confirmation To Industry Wide Downcycle

WHL and YMM also reported their August revenue last week, after EMC. WHL's August revenue fell 20% YoY, 12% MoM and 40% from its peak in Jan 2022. YMM's August revenue also fell both YoY and MoM. If the same MoM pace continues for Sep, the three Taiwanese liners will likely report 9% M0M lower top line and hence 7% QoQ lower top line for for 3Q 2022. Liner industry reported about 58% EBIT margin and 50% net profit margin during 2Q 2022. So on the ballpark, every 1% drop in top line would mean

Companies

Ranking Liners By Dividend: Yang Ming and OOIL top

The best yard stick, in our view, measuring management performance is the financial return generate over time. And the most direct financial return for shareholders is the dividend pay-out relative to a company's market value. Liners have been swimming in cash on extraordinary earnings since 2021. Reasonably, they also distributed dividend generously. Between 2021 and July 2022 end, a total of $38bn* of dividend paid while another $14bn have been committed to be paid in 2022 by the 16 shipping

Companies

COSCO 22Q2 Results: Unwinding Provision Helped

COSCO 22Q2 results were out overnight. Earnings have already been given in the alert last month. So the new news is dividend,HK2 or 50% payout ratio, which is ahead of the analysts estimates. Yet the stock ended down in the Hong Kong trading session. The results are all good. Top line dropped just 4% QoQ as 2% higher volume mitigate some fall in freight rates while slot costs dropped by a whopping 23%. Slot costs are the OPEX incurred in a quarter divided by operating capacity, which help make

Markets

How Has Container Shipping Stacked Up Against MSCI World?

Container liners proved to be able to generate values for shareholders despite of the cyclicality of their operating performance. From 2000 to July 2022, container liners returned over 700% to their shareholders whereas during the same period MSCI World returned only 440%.

Companies

OOIL Interim In-Line but Costs Figures Questionable

OOIL reported its interim results during lunch last Friday (19th Aug). The results were great in most counters, e.g. 31% QoQ, 101% YoY and then 70% dividend pay-out ratio. But the top line report a month ago has already suggested OOIL earnings may be up $1.2-1.3bn HoH, which is more of less what OOIL report for the bottom line last Friday. The dividend pay-out ratio now becomes a guestimate for its shareholders as OOIL has paid out between 100% and 50% last two rounds. Having a net cash positi

Companies

ZIM's Earning Down QoQ on Revenue Yield

ZIM reported before market open today. The results probably came out worse than capital market's expectation. This report on its own is fantastic but the sequential drop in earnings is more than expected and worse among its container liner peers. The sharper than expected drop (22% QoQ) in earnings is driven mainly by the sequential drop in the revenue yield. ZIM's revenue yield, i.e. revenue generated per slot during a quarter. At $6,993/teu slot, ZIM's 2Q revenue yield is still the highest r

Companies

YMM 2Q also turned south

YMM's reported another set of great results much in line with the other liners already reported. However, market consensus may have expected it and the market focus at this point is whether the liner earnings could sustain. YMM's net profit were down 12% QoQ on sequential decline in the spot freight rates and increase in bunker price. In the details, liner EBIT down 8% QoQ or $217mn. Revenue was down $110mn QoQ, driven primarily by the spot freight rates, while bunker expenses, driven by bunker

Financials

HMM 2Q earnings dropped QoQ

HMM reported on 10th Aug. HMM's 2Q earnings was down 13% QoQ at group level. (correction: previously mistaken as 58% drop) Though, the group level operator cashflow was down only 3% QoQ. Hence, most of the 13% sequential drop in earnings was due to non cash items. One of those non cash items is the derivative valuation losses (>KRW 1bn), which, in our estimate, may be long KRW positions as hedges to HMM's likely future KRW payments e.g. debts and head office expenses. However, HMM container d

Companies

TWN Liners Top Line Peaked

Taiwanese liners' industry first top line reports came out over the last three days. In July, Evergreen delivered another record revenue while both Yang Ming and Wan Hai saw their top line came of 5% and 6% MoM respectively. In aggregate, the Taiwanese liners' top line in NTD was down 1% MoM. Since USD has strengthened further in July, these liners' top line in USD maybe down 2% MoM. Given July volume usually is higher than same in June. Average freight rates may be down sequentially during J

Companies

Hapag Lloyd reported strong results

Hapag Lloyd reported 22Q2 results before market on Aug 11. Northing surprising for those following the Taiwanese liners top lines, Maersk and and ONE reports. Hapag Lloyd's earnings edged higher QoQ to have another all time high. 2022 guidance is being revised upward now that management expected 2022 $19.5bn EBIT (previously $17.5bn; 2021 $ 11.1bn). Highest analyst estimate in the capital is expecting Hapag Lloyd to double its EPS YoY this year. In the details, the sequential drop in bunker con

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