On July 6, GLONHWI | Furui published a report saying that the decline in freight charges from Oriental Overseas (0316.HK) caused its revenue to decline for four consecutive quarters, but freight rates have not yet bottomed out. The bank expects that after the recent increase in the comprehensive rate surcharge (GRI), the market will pay attention to spot freight charges, but due to delays in peak season and weak cargo volume, it is difficult for freight rates to continue to rise, so it is expected that the group's profits have peaked. The bank maintained the Group's “Outperform the Market” rating with a target price of HK$83. The bank said that the group's container revenue in the second quarter fell 9% month-on-month and fell from a peak of HK$5.3 billion in the same period in 2022 to HK$2 billion; total traffic volume increased 7% month-on-month, with traffic volume in Asia, Europe and the Trans-Pacific region increasing 9%. However, the average freight cost per TEU fell 15% month-on-month to HK$1,063, the lowest level since the third quarter of 2020. The shipping container revenue will continue to decline month-on-month, as the second quarter has yet to reflect the impact of lower trans-Pacific contract rates; continued weakness in spot freight rates between Asia and Europe; and a delay of one to two months in revenue confirmation. The bank expects that the group's spot freight rates in the second half of the year will remain under pressure and put pressure on profits. It also believes that spot freight charges will not continue to rebound until the peak season begins, but the exact time is still unknown.