The Big Bank: HSBC lowers target price for shipping stocks, OOIL and COSCO SHIP INTL ratings downgraded to "Reduce"

AASTOCKS
2025.06.25 03:26

HSBC Global Research pointed out that the shipping stocks covered by the bank have averaged a 12% increase this year. Trans-Pacific shipping has seen early shipments due to tariff concerns, supporting first-quarter profits. Although the temporary suspension of equivalent tariffs led to a 73% increase in the Shanghai Export Container Freight Index (SFCI) in the second quarter, the index has since fallen 17% from its high due to weakened bookings. The bank expects that tariff uncertainty will pressure shipping demand in the second half of the year, with market focus returning to overcapacity and declining profits.

The bank believes that the benefits of the tariff suspension have already been reflected in stock prices, but tariff uncertainty and overcapacity may put pressure on profits. The bank has downgraded its investment rating for SITC International (01308.HK) from "Buy" to "Hold," with a target price reduced from HKD 26 to HKD 25. The bank has also downgraded its investment ratings for Orient Overseas (00316.HK) and COSCO Shipping International (01919.HK) from "Hold" to "Reduce," with target prices lowered from HKD 120 and HKD 14 to HKD 100 and HKD 11, respectively

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