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2026-06-29 13:03:37 HSBC Global Investment Research published a report citing insights from a webinar hosted by industry expert network Linerlytica, noting that the upcycle in the global container shipping industry is stronger than expected. Demand is supported by structural (technology-driven) and broad-based factors, rather than merely front-loaded shipments ahead of tariffs. Supported by persistently tight capacity and improving demand, market conditions are expected to last at least until August this year and possibly extend to September, driving QoQ expansion in EBIT margin for the shipping industry from 2Q26 to 3Q26. The broker expects overall industry EBIT margin to rise from about 5% in 1Q26 to around 10% in 2Q26. If freight rates remain firm, margins could increase further in 3Q26. Industry leaders such as Maersk and Hapag-Lloyd may also raise their FY2026 earnings guidance. HSBC Global Investment Research emphasized that current freight rates are still climbing rather than peaking and retreating. Freight rate indicators continued to move higher in late June, and shipping companies are actively pushing for rate hikes in July. On the demand side, traditional Chinese export goods (such as apparel, footwear and toys) were relatively weak from January to May this year, indicating that industry growth is not driven by a surge in traditional consumption. Instead, it is mainly supported by demand related to artificial intelligence and data center construction, clean technology (including batteries, electric vehicles and solar energy), and power infrastructure for data centers. While easing tensions in the Red Sea and the release of additional capacity represent key downside risks, ongoing port congestion is currently supporting tight capacity conditions. Among Hong Kong-listed container shipping stocks, HSBC Global Investment Research maintained its Buy rating on COSCO SHIP HOLD (01919.HK) H-shares and COSCO SHIPPING (601919.SH) A-shares, keeping the TP for the H-shares at HKD17.2. The broker believes its recent earnings trajectory and improving industry structure support a higher valuation, while a 50% payout ratio for FY2026 to FY2028 provides a clear shareholder return framework. In addition, the broker maintained its Hold ratings on OOIL (00316.HK) and SITC (01308.HK), with TPs unchanged at HKD130 and HKD31 respectively. (ad/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |