Buy CSET-H vs. Sell CSH-H; Buy NYK and MOL vs. Sell K-Line。    We are bullish on bulker, for which we expect to see multi-year upcycle, driven byimproving S/D. Conversely, we remain bearish on container. The 3Q peak seasonwas muted while accelerating mega vessel deliveries will continue to weigh in2018. In China, CSET-H's earnings set to improve along with tanker cycle recoveryand current 0.5x P/B looks rather compelling. Trading at 1.7x P/B, CSH-H looksovervalued given deteriorating outlook for container. In Japan, we favor NYK (U/Gto Buy) and MOL over K-Line. Apart from expensive valuations, K-Line has a higherexposure to container, which suggests that its earnings outlook is cloudier thanthe other two carriers. We upgrade NYK to Buy from Hold on earnings upgradespost a stronger-than-expected 2Q. Corporate actions and shareholder activismhave substantially lifted share prices of CSH-H and K-Line, which are now tradingat valuations that are out of line with our projections of future returns and at recordpremiums over their country peers. We think this looks unsustainable, furtherunderpinning our stock calls.。    CN: CSH-H trading at a record premium over CSET-H, unsustainable。    CSH-H is currently trading at 1.7x P/B, or a 237% premium over CSET's 0.5x.This is an all-time high with the exception of July-August this year, when theannouncement of the OOIL acquisition lifted the former's share price significantly.The average premium since 2005is 78%. Fundamentally, after a disappointing 3Qpeak season, we expect container rates to drop further, dragging CSH-H downinto loss-making territory again in 4Q. We remain bearish on container in 2018as mega vessel deliveries are set to accelerate. Conversely, the tanker cycle hasalready hit bottom in 3Q. With VLCC rates tripling in the past month and withimproving S/D starting 2018, we expect CSET-H's earnings to recover in the next1-2years. With the acquisition and placement being released, CSH-H's 1.7x P/Blooks expensive vs. 2018/19E RoE of 1.5%/4.2%. Meanwhile, with ROE improvingto 6.2/8.3% in 2018/19E, CSET-H looks poised to re-rate from its current 0.5x P/B.。

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