Bank of America Securities: Lower target price for OOIL (00316) and COSCO Shipping Holdings (01919) to reduce profit margin forecasts.

Bank of America Securities released a research report stating that it has lowered its EBIT profit margin forecast for the container shipping industry in the Asia-Pacific region by 100 basis points this year to reflect the first quarter operational performance and the milder-than-expected supply and demand tension caused by the Middle East conflict. Although the Middle East conflict is expected to temporarily boost profits in the first half of this year, the bank believes that the EBIT profit margin for container shipping will still be halved to around 5% for the full year, and is expected to turn into losses in 2027 to 2028 due to excess capacity. The bank maintains a generally negative view on OOIL (00316) and COSCO Shipping Holdings (01919), giving them a "underperform" rating. The target price for Orient Overseas International Limited has been lowered from 119 Hong Kong dollars to 112 Hong Kong dollars, while the target price for COSCO Shipping Holdings has been reduced from 13.5 Hong Kong dollars to 12.5 Hong Kong dollars. The bank maintains a "neutral" rating and a target price of 37 Hong Kong dollars for SITC (01308) due to its focus on intra-Asia routes, providing better cushioning and profitability in 2026 to 2027.