iM Securities analyzed that while a deterioration in performance is expected for HMM on the 15th, an aggressive dividends policy and plans for stock repurchase and retirement are positively impacting the stock price. The investment opinion was upgraded from 'neutral (Hold)' to 'buy (Buy)', and the target price was raised from 21,000 won to 31,000 won. HMM's closing price the previous day was 25,500 won.
In the second quarter of this year, HMM's consolidated revenue is expected to decrease by 8.7% year-on-year to 2.6 trillion won, while operating profit is projected to decline by 37.2% year-on-year to 385.8 billion won.
Baeseo, a researcher at iM Securities, noted, "While there was some benefit from front-loading due to the suspension of high tariffs between the U.S. and China in May, profitability has decreased due to the overall drop in freight rates."
However, since the announcement of the suspension of high tariffs between the U.S. and China on May 12th, HMM's stock price has shown significant differentiation from the stock price trends of global container shipping companies.
While stocks of global container shipping companies like Maersk and Hapag-Lloyd rose by 14.4% and fell by 1.9%, respectively, HMM's stock price increased by 39.6%.
Baeseo said, "Currently, the U.S. tariff policy remains very uncertain, and the Shanghai Containerized Freight Index (SCFI) has fallen for five consecutive weeks."
Amid this situation, the reason for HMM's rising stock price is attributed to the stock repurchase and retirement that must be conducted soon and the subsequent reduction in market circulation.
Baeseo explained, "Amid increasing market expectations for shareholder return, such as the passage of the recent amendment to the Commercial Act through the National Assembly, HMM's aggressive dividends policy and plans for a 2 trillion won stock repurchase and retirement are positively impacting the stock price," adding, "Additionally, depending on the scale of the participation of the Korea Development Bank and the Korea Maritime Promotion Corporation in the stock repurchase, the market circulation may further decrease, which could act as upward pressure on the stock price."