Daishin Securities announced on August 25 that it expects HMM to benefit from sustained strong shipping rates due to prolonged geopolitical bottlenecks, raising its target price to 29,000 won while maintaining a 'buy' rating.
Researcher Lee Jin-hee from Daishin Securities stated in a report that despite the completion of much of the early shipments aimed at avoiding tariffs in the second quarter, demand remained robust through August, driven by consumer goods ahead of the year-end shopping season and school openings in the U.S.
Lee noted that HMM's second-quarter revenue reached 3.402 trillion won, with an operating profit of 354.1 billion won. He explained that the increase in cargo volume led to higher freight rates, while rising fuel costs, which are reflected with a two-month lag, contributed to a slight underperformance in operating profit compared to consensus estimates.
Looking ahead, he projected that freight rates in Europe may weaken due to the early shipment volumes already being accounted for in the first half of the year. He assessed that the lower-than-expected average freight rates in the second quarter were due to relative weakness in the U.S. routes and changes in service mix.
Lee added that this situation is influenced more by alliance operations, blank sailings, and voyage adjustments rather than a simple decline in market share.
Furthermore, he indicated that since last year, the container business has faced structural oversupply due to an increase in new ship deliveries, leading to discounts despite rising freight rates. However, he believes that ongoing supply bottlenecks stemming from the Middle East crisis will continue to benefit container shipping companies throughout this year.
* This article has been translated by AI.
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