Bank of America Securities: Upping The Pacific shipping (02343) target price to HK$3.7, maintaining a "neutral" rating.

Bank of America Securities released a research report stating that The Pacific Shipping (02343) had mixed performance in the second half of 2025, with profit performance weaker than expected, but shareholder returns were surprising, with the dividend payout ratio increasing from 50% to 100%. The bank believes this supports a dividend rate of 5.6% in 2026, with an additional $40 million in share buyback space. Considering valuation factors, the bank maintains a "neutral" rating, based on The Pacific Shipping currently trading at 1.25 times price-to-book ratio; the target price has been raised from HK$2.75 to HK$3.7. In addition, the group acknowledged an oversupply of dry bulk shipping capacity in 2026, but management remains confident in the market's performance and ability to overcome pressure, given ongoing geopolitical turmoil that may exacerbate trade disruptions in the Middle East region. Bank of America Securities also pointed out that management believes that under the influence of geopolitical disturbances, industry freight rates are improving, consistent with the good freight rates (daily rental rates increased by $1,500) locked in during the first quarter of 2026. As a result, the group's profit forecast for the next two years has been increased by an average of 50%.