DAISHIN SECURITIES noted on the 4th that as short-term (Spot) container freight rates have significantly risen, the performance of the domestic shipping company HMM is expected to improve. Consequently, it maintained its 'neutral (Marketperform)' rating, but raised the 6-month target price to 26,000 won, a 13% increase from the previous level. HMM ended the previous trading day at 22,300 won.
Yang Ji-hwan, a researcher at DAISHIN SECURITIES, explained regarding the reason for raising the target price, "This reflects the rise in short-term container freight rates that continued for four weeks starting from the second week of May, along with upward revisions for the second quarter and 2025 container freight forecasts and performance estimates. Considering the high profitability and fleet competitiveness compared to global competitors, there is no reason to be undervalued."
Yang added, "With a planned share buyback and cancellation of 2 trillion won in scale, it is expected to support the downside of the stock price," but noted, "However, the existing outlook that container market conditions will remain in a supply surplus is maintained for 2025-2026."
According to DAISHIN SECURITIES, last week the Shanghai Container Freight Index (SCFI) recorded 2,072 points, the highest level since January 17, 2025. This is an increase of 30.7% (486.6 points) compared to the previous weekend's SCFI of 1,586 points. In particular, the SCFI for the U.S. West Coast and inland areas increased by 45.7% and 57.9%, respectively, to $6,243 and $5,172 per 40-foot container (FEU) compared to the previous week.
Yang analyzed, "The significant rise in short-term rates for the U.S. routes is due to a sharp increase in bookings for U.S. containers following tariff reductions and deferrals between the U.S. and China, as well as the impact of the peak season surcharge and Global Rate Increase (GRI) by global shipping companies," and noted, "The SCFI European rates also reached their highest levels since the end of February."