Glonghui, March 13 | Morgan Stanley published a research report stating that Oriental Overseas International is in a cyclical downturn and has a conservative view on its dividends. The bank lowered its profit forecast for each year from 2023 to 25 by 24%, 5%, and 15%, respectively, taking into account the Group's lower interest rates and sales forecasts. In view of the continuous downward cycle of container transportation, the Group's profit is expected to drop 84% year-on-year last year, and another 13% each this year and next. The bank maintained the Group's “reduced holdings” rating, and the target price was lowered from HK$77.2 to HK$75. The bank said that in view of the regulatory authorities' emphasis on market value management of state-owned enterprises, the group's dividend payout ratio is expected to be 70% from 2023 to 25. However, considering the potential capital expenditure of a new ship, dividends have a downside risk. The bank also mentioned that oversupply is still a worrying issue. It believes that operators have room to speed up ship construction when freight rates rise, which will offset the positive impact of disruptions in Red Sea capacity and lower the entire sector from recorded profits to balance of payments.