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Profit for the whole year doubled by 5 times, Xingxing accelerated its listing in the United States, with a target valuation of 2 billion

On December 30 last year, the Israeli shipping company ZIM submitted a document to the US Securities and Exchange Commission to apply for an initial public offering (IPO) listing, which aroused widespread concern. The company plans to price its shares on January 27 and list it on the New York Stock Exchange within a few days.

According to its newly revised prospectus, ZIM plans to sell 17.5 million shares at a target price of $16-19 per share. Based on the median value of the target range, the total financing will be 306.5 million US dollars (17.50 US dollars per share).

IPO investors will hold 14.9% of the issued shares. The total number of shares issued after the IPO is 117.5 million shares. Calculated according to the median price, ZIM's market value target is US$2.056 billion.

Profit for the whole year doubled by 5 times, Xingxing accelerates its listing in the United States, with a target valuation of US$2 billion

ZIM estimates that the net financing after deducting expenses will be US$281.9 million. If the underwriter’s over-allotment right is fully exercised, the net financing will be US$324.8 million.

Xavier Deistriau, ZIM's chief financial officer, explained in a roadshow presentation to investors that net financing can be used to secure long-term lease agreements for large ships to serve Asia-Pacific trade, purchase more containers and invest more in digital tools.

In the prospectus, Yixing Shipping also mentioned that an important use of raised funds is to invest in ships and containers.

In fact, this is the fourth time Starship has hit the IPO. It was tried in 2008, 2011 and 2016, but failed due to poor market conditions and poor profitability. In 2004, the company's largest shareholder, Kenon Holdings controlled by the Idan Ofer family, privatized it and held a 32% stake.

As a "asset-light" shipping company, Starship ranks the tenth largest shipping company with an actual control capacity of 406,000 TEU, with a chartered capacity of 98.9%. The latest data in the prospectus shows that Starship has only one own ship and no new ship orders.

Profit for the whole year doubled by 5 times, Xingxing accelerates its listing in the United States, with a target valuation of US$2 billion

▍Increase fleet size

The new filing shows that ZIM has been crazy about chartering boats in recent months. Unlike its peers, ZIM does not own about half of the fleet, and all the rest are chartered.

According to the prospectus, from October 1, 2020 to January 19, 2021, 26 new ships will be chartered by Star Line, of which 16 will be placed on intra-Asian routes, 4 will be placed on trans-Pacific routes, and 3 The ship is placed on the Atlantic to Europe route.

As of January 19, the actual shipping capacity of Starship was 96. Except for one of its own ships, the rest were chartered ships. It is worth mentioning that 60% of chartered ships have a remaining charter period of less than one year.

Profit for the whole year doubled by 5 times, Xingxing accelerates its listing in the United States, with a target valuation of US$2 billion

▍Five-fold profit for 2020

The market conditions in 2020, especially the higher freight rates in the second half of the year, have laid a solid foundation for the financial data for Starship's IPO. As far as the third quarter is concerned, the company achieved a net profit of US$144 million, compared with only US$5 million in the same period in 2019.

Yixing has not yet announced financial data for the fourth quarter of 2020, but the roadshow presentation and new prospectus provide preliminary estimates.

The company expects net income in the fourth quarter of 2020 to be between US$342 million and US$367 million. This will bring annual net income to US$500 million to US$525 million, and a net loss of US$13 million in 2019.

ZIM expects adjusted earnings before interest and taxes (EBIT) to be between US$703 million and US$733 million, which is almost five times the 2019 EBIT.

In terms of container volume, the liner company estimates that in the fourth quarter of 2020, the container transportation volume will be 783,000 to 813,000 TEUs, and the annual container transportation volume will reach 2.825 million to 2.855 million TEUs, which is basically the same as in 2019, an increase of about 1%. . The average freight rate ranges from US$1,222/TEU to US$1,234/TEU, a year-on-year increase of 17%-18%.

In terms of debt, as of December 31, 2020, outstanding debt is expected to be between US$1.847 billion and US$1.912 billion, an increase of 13% to 16% from the end of 2019.