COSCO SHIP HOLD(SH:601919)2025-11-25 01:19Summary of Asia Shipping Ecosystems Conference Call Industry Overview - The conference call focused on the Asia shipping industry, particularly the outlook for 2026 and the current dynamics affecting the sector [2][7][8]. Key Insights Demand Trends - Demand trends are highly bifurcated: - Asia-Europe and intra-region trade are resilient. - US routes are lagging, with container imports down approximately 7% year-over-year (Y/Y) [2][7]. - Europe has seen an 11% increase in trade, while the rest of the world is up 8% [2][7]. - Global trade excluding North America has grown around 6%, which is double the normal rate [2][7]. Supply Dynamics - Vessel delivery schedules and evolving emissions standards are critical factors shaping the market: - Global demand has increased by approximately 7-8% since Q4 2023, while global capacity has grown by about 11-12% [7]. - Anticipated large vessel deliveries in 2027/28 could lead to a cyclical downturn, reminiscent of 2015-16, but not as severe as the 2008 crash [7]. - Only 13% of the fleet is up for scrapping, indicating muted scrapping activity [7]. Trade Policy and Geopolitical Factors - Trade policy remains uncertain, particularly regarding the USTR 301 tariff issue, which is politically driven and likely to resurface [7][8]. - The Red Sea passage is a significant variable, with carriers expected to act cautiously due to geopolitical developments [9]. Intra-Region Trade - Intra-region trade is a bright spot, driven by supply chain realignment and India's emergence as a major market [7][8]. - Infrastructure gaps in India, particularly in port capacity, are creating demand for smaller feeder vessels [7]. Shipping Alliances - Ongoing reshuffles in shipping alliances are influencing competitive dynamics: - Financial strength allows carriers to manage capacity without engaging in price wars [8]. - Major carriers like Maersk and Hapag-Lloyd have seen volume growth, but rate declines are attributed to individual strategies rather than alliance structures [8]. Stock Ratings and Recommendations - Overweight ratings are maintained for: - TS Lines (intra-region) - COSCO - OOIL - Evergreen Marine - Mitsui OSK - An Underweight rating is retained for YZJ Shipbuilding, as the shipbuilding cycle has peaked [2][7]. Financial Metrics - The report includes financial metrics for various shipping companies, highlighting potential upside and market capitalization [10][11][12]. Conclusion - The Asia shipping sector is navigating a complex landscape with mixed opportunities and risks. Resilience and adaptability will be key themes for 2026 and beyond, with intra-region trade and supply chain realignment presenting potential growth areas [2][7].