[Click eStock] "HMM, Strong Freight Rate Trend Expected to Sustain Good Performance This Year"

Samsung Securities Report

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Samsung Securities raised the target price for HMM from the previous 17,500 KRW to 22,000 KRW on the 17th, citing better-than-expected earnings and the continuation of a strong freight rate trend this year. The investment opinion was maintained as 'Buy.'

HMM's sales in the fourth quarter of last year reached 2 trillion KRW, a 48.4% increase compared to the same period the previous year. Operating profit recorded 567 billion KRW, successfully turning to a profit. On an annual basis, sales reached 6.4 trillion KRW and operating profit 980.8 billion KRW, achieving the highest profit ever. Analyst Kim Young-ho of Samsung Securities explained, "In the fourth quarter of last year, freight rates were strong, and container segment sales increased by 64% compared to the same period last year due to increased cargo volume."

This year, the strong freight rate trend is expected to continue beyond expectations. Despite being the off-season throughout the year, the cumulative average Shanghai Containerized Freight Index (SCFI) for the first quarter remains high at 2,866 points. The SCFI indexes freight rate information for 15 major routes of container ships departing from Shanghai. Analyst Kim said, "Major port congestion and container box shortages have occurred," adding, "Considering the base effect, the strong freight rates are expected to continue for some time."

Additional growth is also expected through the launch of direct services to the U.S. West Coast and expansion of European routes. Eight 16,000 TEU (one 6m container) vessels are scheduled to be delivered within the year, increasing the container-owned fleet to 830,000 TEU, up 18.2% from the previous year.

Analyst Kim stated, "In the first quarter, freight rates on the U.S. routes, which account for 47% of total container sales, are expected to rise significantly," and added, "Although oil prices have recently surged, this will be offset by the high installation rate of scrubbers, which reduce exhaust emissions, and the introduction of large vessels."

This content was produced with the assistance of AI translation services.