[Click eStock] "HMM, First Step to Enhance Shareholder Value... Freight Rates Expected to Decline"

[Asia Economy Reporter Ji Yeon-jin] Shin Young Securities announced on the 25th that although HMM has taken the first step to enhance shareholder value by exercising the early redemption right on recent private convertible bonds, it has lowered the target stock price from the previous 38,000 KRW to 31,000 KRW, anticipating a decline in shipping freight rates next year.

HMM is expected to record its highest-ever performance in the third quarter of this year, with sales of 3.8258 trillion KRW and operating profit of 2.096 trillion KRW.

Researcher Eom Kyung-ah of Shin Young Securities said, "The direction of freight rates is more important than performance right now," adding, "Although freight rates will remain strong before the holiday season due to the logistics crisis, the processing time after arrival is lengthening, which may lead to an earlier cutoff time for loading cargo that can arrive within the season. This implies an earlier start of the off-season. Freight rates are expected to decline due to off-season effects until the end of the first quarter of next year."

Earlier, HMM announced on the 22nd that it decided to exercise the early redemption right on the 191st private convertible bond. The face value is 600 billion KRW, and the conversion price per share is 7,173 KRW. The number of shares is 83,647,009, but the possibility of conversion into shares has disappeared due to this early redemption.

On the 13th, HMM CEO Bae Jae-hoon posted that he is considering early redemption of perpetual bonds to enhance shareholder value and will consider shareholder dividends when distributable profits arise. The 600 billion KRW 191st convertible bond is the only bond currently eligible for early redemption, while the early redemption eligibility and face value of other outstanding bonds are 1 trillion KRW in 2023, 960 billion KRW in 2024, and 720 billion KRW in 2025. Researcher Eom said, "It is expected that distributable profits will arise based on the year-end financial statements this year, so all promised measures to enhance shareholder value can be implemented."

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