HK Stock Market Move | COSCO Shipping Energy Transportation (01138) fell more than 5% in the afternoon as the strict control over the Strait of Hormuz continues. The company has reassigned VLCC to operate in the Port of Yanbu.

COSCO Shipping Energy Transportation (01138) fell over 5% in the afternoon, dropping 5.48% to HK$18.98 by the time of publication, with a turnover of HK$325 million. On the news front, a report from a maritime data consultant company stated that the traffic in the Strait of Hormuz is still sparse and tightly controlled, with ships still needing to coordinate with the Iranian military when passing through. The report pointed out that navigation conditions, toll arrangements, and the legal framework for passage are still unclear, and the strait has not truly reopened, currently only in a "regulated pause" state. According to Goldman Sachs, COSCO Shipping Energy Transportation has 8 ships (including 3 VLCCs) stranded in the Persian Gulf, unable to collect demurrage fees, which is a short-term drag on the company; the company has redeployed over 10 VLCCs to the Red Sea port of Yanbu, where the TCE can reach up to $17-18,000 per day, becoming an important source of profit increase. Morgan Stanley, on the other hand, believes that the strengthening spot market will boost the profitability of tankers, expecting a 54% and 4% increase in net profit for COSCO Shipping Energy Transportation this year and next year, respectively.