It is a healthy staple food restaurant’Ans Lab’. Today, after 5 years of treatment, the’returned belly-go-dong’ has recently revived splendidly. HMM (formerly Hyundai Merchant Marine) I’m going to talk. Yes, I know. A lot has risen. HMM’s stock price was around KRW 2,000 a year ago, but is now fluctuating around KRW 20,000. 1000% has risen in a year! It’s better than Tesla in terms of returns alone (even if you take into account split-offs, etc.). Even though it has risen a lot, the reason for introducing HMM is that global shipping rates are unlikely to drop for the time being (unlike expectations).
HMM’s world’s largest container ship Algeciras. shutterstock
Shortage of ships, lack of containers, and port congestion
· The’global cargo turmoil’ likely to continue until the end of the year at least in the second quarter
· Still the creditor management system, the sale variable
It’s not just the fare. There are not enough containers to carry goods, and there is a serious congestion that prevents ships from anchoring in ports around the world. The global chief executive of Moller-Maersk, the world’s largest shipping company, says, “I’ve never seen anything like this in my life.” It is said that this will continue until the end of the year, at least in the second quarter of this year.
During the global financial crisis 10 years ago, shipping companies suffered a huge loss due to oversupply. Hanjin Shipping, the 7th largest shipping company in the world at the time, eventually went bankrupt. When Corona 19 appeared early last year, shipping companies remembered that time. The global alliance has led to a significant reduction in the number of ships moving around. However, the global trade volume, which fell sharply from April to May last year, recovered to the previous level in the second half of the year as Chinese factories quickly revived and American consumers sat at home and shopped online. Governments of various countries have asked shipping companies to increase the number of ships, but it is harder than expected to increase the number of ships once reduced in the current global shipping industry, where the alliance system has been solidified.
Current status of container ships waiting in the sea near the ports of Los Angeles and Long Beach, USA. Photo MarineTraffic.com
Moreover, it is no longer a matter of the number of ships. Originally, when the ship leaves China and unloads the cargo at the Port of Los Angeles and Long Beach in the United States, the goods must be delivered to the destination by train or truck, and after a week or two, they have to reload empty containers and return to Asia. However, due to the Corona, the number of port and inland stevedoring workers decreased, and the rush to put down imported containers prevented them from recovering empty containers in time. In the meantime, product orders continue to increase, leading to a global container shortage. 80% of the world’s containers are made by China, but Chinese companies have no sign of increasing container manufacturing.
HMM is said to have generated an operating profit of 980 billion won, the largest since its inception last year. This year, it is expected to generate an operating profit of 880 billion won in the first quarter alone. Fares to Europe have risen sharply following fares to the US. Before and after the Chinese New Year (the Lunar New Year holiday), there were observations that the volume of goods and freight rates would fall, but it rose even further. In addition, President Biden’s stimulus package, which gives the nation 1,400 dollars (approximately 1.59 million won), is expected to pass through the Senate and the House of Representatives soon, and the demand for goods is expected to increase further. In the market, HMM is also expected to open an era of 2 trillion won in operating profit for the first time this year.
A cargo container departing from Taiwan and arriving at the port of Rotterdam in the Netherlands is running on the German Autobahn. shutterstock
HMM’s President Jaehoon Bae has been buying treasury shares every month as part of responsible management. As of this month, we have 85,360 shares of HMM. A total of 355 million won was invested, but now the stock value is 1.8 billion won, which means that it has earned 1.4 billion won.
However, HMM is still under management of creditors such as Korea Development Bank. Looking at the stock price alone, I don’t think that way, but like Ssangyong Motor, it is a company that is striving to normalize management. It is expected that the variable will be whether the Korea Development Bank will claim conversion rights for convertible bonds scheduled to expire this year. The stock price can also be affected by how much the conversion price will be calculated and the number of shares being diluted. There are also variables for sale. As the corporate value has jumped, the view that the Korea Development Bank will have no choice but to weigh the timing of the sale is dominant. It is a point to keep an eye on which companies are sold to.
In conclusion, after 6 months:
Whether you put in more ships or make more containers.
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