The Zhitong Finance App learned that Morgan Stanley released a research report stating that it maintained Pacific Shipping's (02343) “gain” rating and lowered earnings forecasts per share by 18% and 14% for 2024 and 2025, mainly due to the 7% and 5% rate predictions for ultra-convenient bulk carriers (Handymax) and Handysize (Handysize) bulk carriers, respectively, and the target price was reduced by 1% from HK$3 to HK$2.96.

The bank pointed out that the market rebounded strongly after the Lunar New Year. As of March 8, 2024, Supramax and Handysize bulk carrier rates (Spot Rates) rose 23% and 33%, respectively, after the Spring Festival holiday. Meanwhile, the company's dry bulk vessel (dry bulk vessel) prices have further strengthened since the third quarter of 2023. The five-year used ship prices for Supramax and Handysize bulk carriers are close to multi-year highs, which is enough to support Pacific Shipping's net asset value. The current net asset value per share is estimated at HK$3.2, which is 30% higher than the current share price.

According to the report, the company's supply and demand prospects are basically balanced. It is expected that the supply of Handymax bulk carriers will increase by 3.3% and 3.2% from 2024 to 2025, and the Handysize bulk carrier will increase by 3.6% and 3.5%. Despite weak industrial production in the mainland, iron ore transportation from Brazil increased the spot earnings (spot earnings) of Cape of Good Hope ships after the Lunar New Year. Supply-centered policies in the Mainland are likely to support industrial activity, thereby benefiting the demand side of dry bulk transport.