Taipei: A new report out by Drewry suggests only Wan Hai of the big three boxlines in Taiwan will be profitable this year, however the London analyst is most bullish about Evergreen.
Rahul Kapoor, senior analyst at Drewry Maritime Equity Research stated, “Taiwanese container companies will continue to see mixed profitability as we expect long-haul carriers Evergreen and Yang Ming to see full year losses in 2013 with Wan Hai the only exception. We expect earnings for Wan Hai to be resilient and insulated from volatility in the long haul trades but at the same time any economic recovery in the West is unlikely to reward Wan Hai, corroborating our Neutral outlook on the Company. We are much more positive on Evergreen Marine. We positively view Evergreen’s exceptional timing in judging the investment cycles with cash preservation and strong balance sheet at the core of its strategy. We see Evergreen’s fleet expansion to start bearing fruit in next 6-18 months as unit costs become much more competitive and profitability returns. We are Negative on Yang Ming as we don’t believe the worst is behind them in terms of continued losses and are concerned with its stretched balance sheet. Even as we see positives from bigger vessels joining the fleet in 2015-16, we see the delivery timing a little too late as unit costs stay elevated near term with full year profitability returning only in 2015.” [01/10/13]