Hana Securities evaluated on the 15th that both the supply and demand of the container shipping industry, including HMM, are in a difficult-to-predict phase. Hana Securities maintains a 'neutral' investment opinion on HMM and upgraded the target stock price from 18,000 won to 20,000 won. However, this is still lower than the previous day's closing price of 20,800 won.
HMM recorded a revenue of 2.8547 trillion won and an operating profit of 613.9 billion won in the first quarter of this year (January to March). Compared to the same period last year, revenue increased by 23% and operating profit increased by 51%. Researcher Ahn Do-hyun of Hana Securities stated, “The high spot (SPOT, non-recurring short-term contract) rates at the end of last year and the beginning of this year have been reflected, and it seems that long-term contracts signed during the favorable shipping market and exchange rate effects have all played positively.”
The problem is that operating expenses also increased by 17% compared to the same period last year. In particular, the price of freight, which accounts for the largest share of expenses, is estimated to exceed 5%, which could affect future performance, Ahn noted.
It is also difficult to predict the container shipping market. This is due to the many variables involved. There may be temporary stockpiling demand due to the truce in the tariff war between the U.S. and China; however, the forecast for annual cargo volume growth this year remains at 0%. Normal navigation through the Suez Canal has not occurred for more than a year following attacks on commercial vessels by Houthi rebels in Yemen.
However, researcher Ahn noted that uncertainty also has the effect of limiting downward pressure on stock prices. He stated, “The uncertainty surrounding tariffs between the U.S. and China has the effect of adjusting supply by route, and there is a high possibility that this process will prevent a decrease in freight rates.”