Korean Shipper Well Positioned For BDI Hikes

Pan Ocean Company Limited

Background

Pan Ocean Company Limited was founded in 1966 in Seoul, Korea. Together with its subsidiaries, it provides marine transportation.

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It also offers other related services worldwide such as trading, logistics and heavy lifting. The company has over 1,000 employees, of which 35% are on land and 65% maritime.

Business Description

Pan Ocean ships more than 100m tons of cargo per year, using a total of 204 vessels (81 owned and 123 chartered). The company owns vessels of all sizes, including dry bulk and non-dry bulk ships with capacities ranging between 10,000 to 100,000 deadweight tonnage (DWT). The company offers both liner and tramp shipping. As opposed to liner, tramp ships trade on the spot market and have no fixed schedule.

Its services are divided as Break Bulk Liners for transporting steel, coal, wood, equipment, machinery, and facilities; Trampers for iron ore, wood pulp, grain, sugar, lumber, scrap iron, etc.; Large Bulkers, for dry bulk cargo such as grain, coal, iron ore, and minerals; Containers for a variety of products; and Specialized vessels (tanker, gas carrier, heavy lifter) for petroleum and derivatives.

Pan Ocean Company Limited

Pan Ocean also offers a variety of services adjacent to shipping such as heavy lifter services, tug boats, drill ships, ocean platforms, as well as steel products, including coils, pipes, wire rods, and plates. Pan Ocean is also involved in trading and logistics of agriculture products, such as corn, soybean, wheat, and soybean meal.

Leadership

Kim Hong-Guk is the current Chairman and co-CEO of Pan Ocean. He is also Chairman in several other companies including Harim Co., Ltd. (136480 KS) and Farmsco Co., Ltd. (036580 KS). His education consists of Bachelor’s and Master’s degree in Business Administration from Howon University and Chonbuk National University in Korea.

Pan Ocean Company Limited

Choo Sung-Yob was appointed the President and co-CEO of Pan Ocean in 2010. He joined the group back in 1997 and has served as the General Manager, Chief of Strategic Planning & Administration as well as several other positions before being appointed to his current role. He received his Bachelor’s Degree in Oceanography in 1979 from Seoul National University, Korea.

World Class Benchmarking

Profitable Growth was ranked the worst in 2013 but has improved a bit since. Since 2015, Pan Ocean has ranked at #7 among 1,470 large Industrials companies globally.

Profitability exhibit a similar trend to Profitable Growth. Growth has experienced more fluctuations and ranked at #4 in the past 12 months.

Pan Ocean Company Limited

Asset utilization has ranked very poorly over the years. Profit margin has been above average since 2014.

Sales growth has seen great improvements in rank, in 2014 Pan Ocean ranked #10 and in the past 12 months the rank had reached #1. Margin change has been volatile and ranked average in the most recent period.

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.

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