A Chinese F inancia l Leasing Company View of the Of fshore Market Today M i n s h e n g F i n a n c i a l L e a s i n g C o . , L t d
March, 2017
Index
Chinese Leasing Companies
General view of offshore market
Opportunities and threats
Where is the future
2
Chinese Leasing Companies in sh ipping
In 2016, total investment around11.5 billion USD
Leading by ICBC Leasing, Minsheng Financial Leasing, Bank of
Communications Leasing etc.
Transactions with top names in shipping industry
Financial lease & Operating lease
Resource: Financial Times 2017/03/13
3
4
General v iew of o f fshore market
Exploration and Development investment
0
200
400
600
800
2009 2010 2011 2012 2013 2014 2015 2016
E&D Investment (B. USD)
6
General v iew of o f fshore market Drilling Sector
45 34 30
80
163
223
11 11 4 20
40 43
0
50
100
150
200
250
2011 2012 2013 2014 2015 2016
StackingScarp
7
General v iew of o f fshore market PSV & AHTS Sector
231 293 358 441
1443
1798
19 32 30 34 28 37 0
200400600800
100012001400160018002000
2011 2012 2013 2014 2015 2016
StackingScarp
8
Opportuni t ies and threats
Offshore companies are struggling…
Hercules Offshore
Havila Shipping
Seadrill
Viking Supply Ships
Otto Marine
Ezra Holding Company
9
Opportuni t ies and threats
Who can enter into offshore market now?
Assets player
Private Equity
Hedge Funds
Why?
Capital-intensive
Low asset price in this stage
Cycling
10
Opportuni t ies and threats
Other Factors
Shale oil production
OPEC agreement
Trump’s new policy
Deep sea in China
Alternative energy recourses
New technology
Content • Market situation
• Oil price is still unstable • Oil industry is heavily hurt and yet to recover • Oil service industry is heavily hurt • Offshore industry is restructuring • Exploration and drilling sectors are still bad • Production sector begin to see new activity • The whole value chain is restructuring • Debt holders lose money due to the default • New equity is required • Assets is under valued under replaced cost measure, while everything is over priced under cash flow discounted model • The way to measure the industry does not work, ie, pe, pb, ebitea multiple • 10% 90% NB model will never be there anymore • The crisis stop the technical development of the industry, eg, canstallation, seatao, d90, • While, those assets will be valuable again if we believe the market will come back • Look at the production area, work with major under new mooring place • Risk is less than before if we can have an agreement on the repayment • • Eg: seadrill, Ezra,