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Zim - staying afloat during the freight rate waves
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Resumo(s)
The aim of this project is to develop an Equity Research report about ZIM, as well
as providing a final recommendation related to its underlying stock. This project
was conducted by me and my colleague Duarte Matos. Therefore, I recommend the
reading of our consolidated report (annexed), to better understand our work.
ZIM is a global asset-light container liner shipping company with leadership
positions in niche markets, operating a fleet of 87 vessels across five geographic
trade zones – ranked 11th among shipping carriers globally, controlling
approximately 1,6% of the global shipping capacity, according to Alphaliner.
Its Blue Ocean strategy regarding operations – essentially all vessels are chartered,
brings interesting aspects regarding financial accounts, especially costs, as ZIM is
able to adapt its fleet to answer demand. This will influence the fair value of the
company and how ZIM will perform against its peers.
In the first chapter, we discuss the value drivers of the company and reasonings
behind the forecast of the financial records. These are split regarding the Free Cash
Flow map. Lastly, in the final chapter we computed the fair value of the share price,
using the WACC and a Discounted Cash Flow model, which are explained in dept.
The model returns a price that reflects our vision on the future of the company,
nevertheless we conducted a sensitivity analysis in order to account for WACC
variability, which impacts the fair value.
Descrição
Palavras-chave
Valuation Logistics Finance Esg International trade Commerce Freight rate Teus carried