Goldman Sachs: Raises target price of COSCO Shipping Holdings (01919) to 12.5 Hong Kong dollars. Management is cautiously optimistic about long-term freight rates.

Goldman Sachs released a research report stating that the management of COSCO Shipping Holdings (01919, 601919.SH) maintains a cautious and optimistic attitude towards the long-term freight performance of the industry because more than 25% of existing cargo ships will exceed 20 years of age and need to be scrapped between 2028 and 2030. At the same time, freight volume is growing strongly, especially on the Southeast Asia, Europe, and Africa routes. Based on performance, the bank raised its net profit forecast for 2025 to 2027 by 25% to 46%, mainly reflecting better-than-expected profits in the third quarter and delays in the collection of port dues between China and the US. The target price for H shares has been raised from HK$11.5 to HK$12.5, and the target price for A shares has been raised from RMB 14.7 to RMB 16, maintaining a "neutral" rating. The management also noted the rebound in spot freight rates in October, mainly driven by early shipments due to Black Friday and the originally planned US tariffs on Chinese goods. As for the better-than-expected profits in the third quarter, the management attributed it to excellent freight performance, as the company has a higher proportion of routes in Asia and better cost control compared to its peers.