Bank of America Securities pointed out that in view of the recent increase in spot freight rates and the impossibility of resuming Red Sea navigation in the short term, COSCO Maritime Control (01919) profits are expected to remain strong for a longer period of time, and the valuation does not reflect the future.
The Zhitong Finance App learned that Bank of America Securities released a research report stating that it reaffirmed the “buy” rating of COSCO Marine Holdings (01919) and reduced the company's earnings forecast per share for 2024 to 2026 by an average of 4%, and raised the target price from HK$9.2 to HK$10.5, taking into account the performance of the first quarter results.
According to the report, COSCO Maritime Control's performance for the first quarter of 2024 was slightly lower than expected due to weak actual freight rates, but the results also reflected the benefits of the Red Sea crisis. The profit margin before interest and tax for containers in the first quarter of this year was as high as 19%. The bank pointed out that in view of the recent increase in spot freight rates and the impossibility of resuming Red Sea navigation in the short term, profits are expected to remain strong for a longer period of time, and the valuation does not reflect the future.