Reporter Wang sijia

David PalmerCEOWah Kwong MaritimeTransport Holdings Limited

Reporter: How to comprehend the current position of Wah Kwong in the Hong Kong shipping industry and the world shipping industry?

David Palmer: WK has been a leading shipping company in Hong Kong since 1952 and a founding member of HKSOA in 1957. WK was one of the first shipowners to build ships in Japan in the 1960’s and in China in the 1990’s. The Chao family has consistently taken a strong interest in the development of Hong Kong’s position as a major international shipping hub and our current Chairman,Sabrina Chao recently stepped down from her role as Chairman of HK Ship Owners Association,continuing he father’s active engagement with the HK government to effect the promotion of HK as an international maritime centre. Her recent election to the position of “Commodore” of the Connecticut

Maritime Association is in part a recognition of her distinguished services to the HK and international shipping industry.

The company’s commitment to playing our role in international shipping regulatory and advisory bodies demonstrates a truly global view from our management. We are a Chinese owned company based in HK with a global outlook.

Reporter: How to comprehend the future position of Wah Kwong in the Hong Kong shipping industry and the world shipping industry?

David Palmer: Shipowner’s are getting larger as consolidation of the industry evolves but this often involves going public. Being a private company allows WK more flexibility. We are not pressured to make investments to demonstrate to investors that we are active and growing. We can make decisions quickly that do not have to be disclosed and then scrutinized by investors, analysts etc. This ultimately is beneficial to our Charterers because we are more stable. I would expect WK to grow steadily and conservatively as it has done for the last 70 years and enhance it’s reputation as an honest, trustworthy and valuable partner to those companies that are important to us. Reputation is of course everything in shipping.

Reporter: What are the gaps between reality and goal? What are the advantages and disadvantages of Wah Kwong to achieve the goal? What needs to be done in the future?

David Palmer: We are analyzing the way in which we create and add value and how that effects our business model. It is important that we make money from operations – otherwise it will be difficult to make it on the asset side. We will maintain a conservative balance sheet and ensure we have enough liquidity.Wah Kwong’s reputation in both China, Japan, HK and the rest of the world is a significant competitive advantage and it is Wah Kwong’s ability to think like Chinese owners and operators which allows us to serve as a bridge between China and the world. We will develop our past and future partnerships through good projects at good yards with partner friendly incentives.

Global shipping has become increasingly China focused however different times need different ships – new trades and new ship types are emerging. If Wah Kwong can get the right vehicle then we have the key to future markets and in doing so we need to develop a business model that is resilient to market fluctuations.

Reporter: Why do you choose Wah Kwong?

David Palmer: I always knew the company as well known and well managed and I was keen to make a transition back to the management side of shipping from investment banking. WK was innately appreciative of my grey hairs! - and provides a well-rounded final leg to my 40 plus year career in shipping.

Reporter: What are your advantages in achieving the goal of Wah Kwong? How can these advantages be exploited?

David Palmer: I bring a wide range of skills to WK,not least the perspective of being both a banker and a ship owner. Having working for a Chinese shipowner International Maritime Carriers (IMC) in the past and having lived and worked in Asia and in Hong Kong/Singapore for Swire and Pareto, I feel confident that I can hit the ground running and help steer WK forward.

Reporter: How do you orientate your role in the Wah Kwong? What challenges will you face in performing your duties?

David Palmer: There will be five key factors in managing Wah Kwong – Five “F”’s if you like. Family,Fleet, Finances, Friends and the Future – getting an effective blend of these factors will be the biggest challenge. To my mind being a good leader means being an active communicator, being open and being approachable.

Reporter: As the market is showing signs of recovery，how do you think the future recovery will unfold? How does Wah Kwong improve its survivability in a competitive market environment and remain competitive?

David Palmer: We are entering an era where any upturn can be killed much quicker than it was before and I expect we will see significant volatility in all shipping markets. We have a rising trend in dry bulk but the volatility around that trend is difficult to manage.I expect to see a similar tanker recovery as OPEC production limits are relaxed. Wah Kwong will continue to evolve, adapt and succeed using the talents we have to create value added solutions for our customers. Right decisions on fleet growth are based on timing access to capital and prudent market analysis – which requires insight on where the market is and foresight on where it is heading.

Reporter: The shipping market continues to be depressed, and many companies choose to merger and acquisition to tide them over. In your opinion,whether the dry bulk shipping market will imitate the consolidation of the container shipping market?If so, what form will it take?

David Palmer: Putting two highly leveraged dry bulk companies together in a highly fragmented market just makes one hugely leveraged dry bulk company – A company that will likely be constrained by it’s bankers from growing and effectively be unable to move. It is unlikely that such consolidation will provide the greater pricing and bargaining power that we can see in the container business and , if it happens, will be the result of financial backers expressing a desire for larger companies rather than making any meaningful contribution through market consolidation. The same is not so true in the larger crude tanker sector where consolidation in the VLCC sector is building in response to a dire market and we can expect consolidation to continue in large tankers until pricing power is equalized.