Well-known shipping companies to restart the ocean route and the third impact of IPO
TS Lines, a Taiwanese shipping company, decided to withdraw from its original plans to expand its overseas business after the rapid normalisation of the container market last year. However, with the current rapid surge in freight rates on major east-west routes, the company is planning to return to this area.
At the same time, the company made its third attempt at an initial public offering (IPO) on the Hong Kong Stock Exchange. While the previous two attempts in 2022 and 2023 failed due to a post-pandemic correction in the container shipping market, the company appears to have been encouraged by the current renewed bull market and decided to challenge the market again.
On May 30, Desxiang filed a new prospectus and appointed jpmorgan Chase and China Merchants Securities as sponsors for its listing. Despite declining earnings in 2023, Tesamm is optimistic about the growing demand for freight from East Asia to India and the Middle East and believes this will be a strong support for its successful listing.
On June 6, Dexiang Shipping officially signed a construction contract with Shanghai Waigaoqiao Shipbuilding Co., LTD., covering two 14,000TEU (TEU) methanol fuel reserve (READY) large container ships and two 7,000TEU medium-sized container ships. At the same time, the 7,000TEU container ship "TS DUBAI" built for TESham Shipping completed its naming ceremony on the same day.
Chen Desheng, founder and chairman of Desxiang Shipping, said the new vessels, which are expected to be delivered in 2027, will be deployed on trans-Pacific routes or Far East to South America routes to meet the company's growing shipping demand.
TS Lines is a leading, fast-growing and highly profitable shipping company focused on Asia, founded in 2001 by Tan Tak Siong. The company operates primarily in Asia, which is the world's largest container market and one of the fastest growing regions for seaborne cargo volume. The company has an extensive maritime network in Asia, originating from operating high-concentration, high-frequency short-haul routes in the Greater Bay Area of China, and has been operating continuously in the Asian region for 20 years.
However, as the windfall revenue from the epidemic disappeared, Desxiang Shipping's revenue in 2023 slipped to $874.6 million, far lower than the $2.44 billion in 2022, and net profit also plummeted to $20.4 million, far lower than the $1.07 billion and $1.08 billion in 2022 and 2021. Faced with a market correction, TS Lines dropped its Trans-Pacific and Asia-Australia/New Zealand services in 2023.
Despite the challenges, TS Lines highlighted in its prospectus that the company has remained resilient and flexible over the past 10 years, consistently generating positive operating cash flow across multiple shipping cycles, even in the most challenging year of 2023.
According to the latest Alphaliner data, Desiang Shipping ranks 21st among the top 100 global liner companies by capacity, operating 43 vessels, of which 36 are owned and 7 are chartered, with a total capacity of 1,02982 TEU.
In terms of capacity allocation, in 2023, Tesham Shipping's capacity in the Asian-Indian subcontinent totaled 153,804 TEU, accounting for nearly 11% of the total capacity that year. Capacity in the region has grown significantly from 12,103 TEU in 2021.
Entering 2024, TS Lines' freight volume increased to 380000TEU in the first quarter compared to the same period last year. The company opened routes connecting China and East Asia to the Middle East in response to the "boom" in exports from East Asia to the Middle East.
In terms of fleet optimisation, since 2023, TS Lines has sold 10 vessels based on market conditions and returned 12 chartered vessels. Since 2024, the company has taken delivery of three new 7,000TEU vessels, two of which are assigned to the Asian-Indian Subcontinent route and one of which is on a one-year lease from March 2024.
In addition, the company plans to take delivery of five 7,000TEU vessels between June 2024 and 2027. The ships can be operated on their own or leased to other operators, the company said.、
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