Business Analysis and Valuation: Taiwan Container Shipping Industry as an Example

• Main Authors: Wu, ChoChuan, 吳倬銓
• Other Authors: 陳明道
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/71261837712928802699

碩士 === 輔仁大學 === 金融研究所 === 98 === The container shipping industry possesses the advantages of monopolistic and transcendent characteristics with high industry standardization prescribed by laws and regulations of various countries. However, industry revenue is to a large extent subject to the fluctuation of business cycles, make it unstable and difficult to predict. Beyond that, supply elasticity is very low and products are not storable. In addition, operating costs are subject to the oil price shocks while financial positions are hampered by high debt ratios. Major operating investments are concentrated on the container shipping fleet with relatively high depreciation costs. Therefore, the impacts of operating, financial and equity method investment results on firm value vary year by year. This thesis applies a resources deployment model to analyze and value three major container shipping companies in Taiwan, Evergreen Marine Corp., Yang Ming Group and Wan Hai Line Ltd. Their 2008 annual financial statements show that the primary source of profit is from operating equity. Except Evergreen Marine Corp., the other two companies are net borrower. However, all of their returns on operating equity are substantially below effective interest rates, much of the operating profits are eroded by interest expenses and financial losses. This explains why their 2008 returns on equity are lower than prior years.