IPO News丨Dexiang Shipping heard through the Hong Kong Stock Exchange's container shipping network covering 21 countries and regions and 56 major ports around the world

The Zhitong Finance App learned that according to news from the Hong Kong Stock Exchange on October 14, Dexiang Shipping Co., Ltd. passed the Hong Kong Stock Exchange's main board listing hearing, and J.P. Morgan Chase and China Merchants Securities International were co-sponsors.

According to the prospectus, Dexiang Shipping is a container shipping company focused on the Asia-Pacific region. In terms of fleet size, the company ranked 21st among global container shipping companies as of January 1, 2024, with a market share of 0.3%, and ranked 6th among container shipping companies focusing on the Asia-Pacific region in December 2023, with a market share of 2.3%. As of April 30, 2024, the company's container shipping network covers 21 countries and regions and 56 major ports around the world. As of April 30, 2024, the company operated route services covering 16 countries and regions in the Asia-Pacific region.

Dexiang Shipping operates its own independent shipping network, and also operates through arrangements with other carriers (including joint route services, cabin exchange and cabin leasing). Through joint route services, the company and other carriers each designate a specific number of ships to jointly provide shipping services for specific trade routes; and through cabin leasing and space exchange, the company can pay to use a certain number of cabins or exchange cabins with another carrier's vessel.

Furthermore, Dexiang Shipping has a flexible business model. As of April 30, 2024, the company operated 9 independent route services, 22 joint route services, 15 route services operated through class exchange arrangements, and 2 route services operated through space leasing arrangements.

In terms of the company's fleet, as of April 30, 2024, the average age of Dexiang Shipping's own ships is about 3.5 years for each ship. Companies can manage their additional capacity in a number of ways, such as selling their own vessels, returning chartered vessels when the lease expires, or leasing their own or chartered vessels. As of April 30, 2024, Dexiang Shipping has a total of 46 ships (not including any ships leased), including 36 owned vessels and 10 chartered vessels, with a total capacity of 111,011 TEU. Dexiang Shipping's fleet consists mostly of small ships. Each ship has a capacity of less than 2000 TEU and can enter most ports in the Asia-Pacific region, so larger ships are more diversified in terms of deployment.

As of the last practical date (October 11, 2024), Dexiang Shipping has ordered three 7,000 TEU ships, one of which is expected to be delivered by the end of 2024, and the remaining two are expected to be delivered in 2026 and 2027, respectively. Furthermore, as of the same date, the company had ordered two 4,300 TEU and three 14,000 TEU ships, which are expected to be delivered in 2027. The ships already ordered by the company are expected to be flexibly deployed on multiple trade routes.

In terms of industry competition, according to the Drury Report, the entry threshold for the container shipping industry is generally very high, mainly due to its high requirements for high capital expenses, global and regional networks with partners, customers and suppliers, ship management and operation capabilities, and long-standing brand and market popularity. In December 2023, the top ten carriers provided about 60.4% of Asia Pacific's total capacity, and competition in the Asia Pacific region is more intense than in other regions because there are many regional carriers operating in this market.

On the financial side, in the four months ended April 30 in 2021, 2022, 2023, and 2024, Dexiang Shipping achieved revenue of approximately US$1,837 million, US$2,443 million, US$875 million, and US$318 million respectively. Profits during the same period were approximately US$1,078 million, US$1,075 million, US$20.382 million and US$9.812 million, respectively.

According to Dexiang Shipping's prospectus, a significant portion of the company's fleet is chartered ships, and a significant portion of the containers are leased containers, which makes the company very sensitive to fluctuations in the chartering market. Therefore, the costs associated with chartering and leasing containers are unpredictable, and may have a significant adverse impact on the company's business, financial situation, operating performance and working capital.