PDF《DHL Global Forwarding, Freight》

1 OCEAN FREIGHT MARKET UPDATE DHL Global Forwarding, Freight August

2017 2

2 Contents TOPIC OF THE MONTH China Cosco Shipping'

s offer to acquire OOCL HIGH LEVEL DEVELOPMENT MARKET OUTLOOK Freight Rates and Volume Development ECONOMIC OUTLOOK &

DEMAND DEVELOPMENT CAPACITY DEVELOPMENT CARRIERS Mergers, Acquisitions and Alliances / Z-Score Update REGULATIONS ? DID YOU KNOW ? Congestion in European ports DHL Global Forwarding | OFR Market Update | Aug

2017 3

3 Topic of the Month C China Cosco Shipping'

s offer to acquire OOCL A P R O M I S I N G O F F E R THE OFFER It values OOIL'

s1) share at HKD 78.

67 (USD 10.07). It is 31% higher than its closing value on the day the offer was issued. COMPARING THE OFFER The offer values OOCL at USD 6.4bn, i.e. 1.4x OOIL'

s P/B ratio (=the net worth of all of OOCL'

s assets minus their debt). In comparison, CMA-CGM acquired NOL for 0.96x its P/B ratio. Although this final figure may be considered as high, OOIL has historically been more profitable than NOL C and freight earnings are higher today than they were at the time of NOL'

s acquisition. Investors have had concerns that the deal may not receive regulators'

approval: shares were last traded at HK$73.10 as at

25 July, for a 7% discount to the COSCO/SIPG offer price. EXPECTED BENEFITS OF THE ACQUISITION China Cosco Shipping is taking over the 3% market share of OOIL on the global container trade. More specifically, it reinforces the acqueror'

s position on several trade routes. The acquisition certainly asserts China Cosco'

s leadership on the North East Asia - Oceania route, taking up to control short of a 1/3 of the trade. FINANCING THE OFFER China Cosco is offering to buy 90.1% of the shares, while Shanghai International Port Group would own the remaining 9.9%. It is solely financed through external debt.

79 JULY 7TH VALUE OFFER

60 SIPG China Cosco Shipping 96% NOL ACQUISITION PRICE V. P/B OOIL ACQUISITION PRICE V. P/B OOIL P/B RATIO NOL P/B RATIO 140% TRADE COSCO SHARE COSCO +OOCL INCREMENTAL SHARE Asia - Indian subcontinent 6% 11% +6% NE Asia - Oceania 14% 27% +13% North Europe - North America 2% 7% +5% Asia - Europe 11% 15% +4% Transpacific 11% 18% +7% Source: Drewry, Alphaliner;

1) OOIL is the mother company of OOCL DHL Global Forwarding | OFR Market Update | Aug

2017 4

4 High Level Market Development C Supply and Demand now Balancing

400 200

0 600 1'

200 1'

000

800 Q2 Q1

17 Q4 Q3 Q2 Q1

15 Q3 Q3 Q2 Q1

16 Q4 2'

500 2'

000 1'

500 1'

000

500 0 Q4 Q3 Q4 Q3 Q2 Q1

16 Q3 Q2 Q1

17 Q2 Q1

15 800

600 400

200 0 Q3 Q4 Q3 Q2 Q1

17 Q2 Q1

15 Q3 Q2 Q1

16 Q4 BIX MGO BIX

380 SHANGHAI CONTAINERIZED FREIGHT INDEX (SCFI)3) WORLD CONTAINER INDEX (WCI)2) BUNKER PRICE INDEX ECONOMIC OUTLOOK GDP GROWTH BY REGION SUPPLY VS DEMAND GROWTH Source: 1)real GDP, Global Insight, Copyright ? IHS, Q4

2016 . All rights reserved;

2)Drewry, in USD/40ft container, including BAF &

THC both ends,

42 individual routes, excluding intra-Asia routes;

3) Shanghai Shipping Exchange, in USD/20ft container and USD/40ft container for US routes,

15 routes from Shanghai, 4) Global Insight, Drewry, 5) Bunker Index, in USD/metric ton, Bunker Index MGO (BIX MGO) is the Average Global Bunker Price for all marine gasoil (MGO) port prices published on the Bunker Index website, Bunker Index

380 CST (BIX 380) is the Average Global Bunker Price for all

380 centistoke (cSt) port prices published on the Bunker Index website 5,3%