[Click eStock] "HMM, Rapid Stock Rebound Expected Upon Resolution of Uncertainty"

Global Container Shipping Stocks Adjusted Amid Macroeconomic Concerns Like China's Power Shortage and Inflation in Various Countries
Daishin Securities Lowers HMM Target Price from 60,000 KRW to 48,000 KRW

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] It is interpreted that HMM's stock price has recently fluctuated due to China's power shortage and inflation. Although HMM recently entered a correction phase along with global container shipping companies, it is interpreted that this will not last long.

On the 5th, Daishin Securities maintained its investment opinion of 'Buy' on HMM. However, the target price was lowered from the previous 60,000 won to 48,000 won. The closing price on the 1st was 31,800 won.

The main reason for the target price downgrade is uncertainty caused by China and inflation. Recently, due to China's power shortage, manufacturing operating rates have declined, raising the possibility that trade volume in China may slow down. Additionally, as global inflationary pressures intensify, countries are implementing liquidity withdrawal measures, which could lead to a slowdown in consumption.

Not only HMM but also global container shipping companies' stock prices have fluctuated. International container shipping companies Maersk, Hapag-Lloyd, Evergreen, and Yang Ming fell by 10.7%, 11.0%, 16.8%, and 16.2%, respectively, between the 27th of last month (local time) and the 1st of this month.

However, Daishin Securities interprets that the stock price correction of container shipping companies is excessive. There is no basis to explain the decline in direct indicators representing the container shipping industry conditions. Yang Ji-hwan, a researcher at Daishin Securities, explained, "This recent decline is presumed to be caused by macroeconomic uncertainty," and added, "It is unlikely that China's power shortage and inflationary pressures will persist for more than one or two quarters." In fact, Chinese authorities recently convened meetings related to power supply and instructed state-owned energy companies to mobilize all means to secure power supply.

Researcher Yang said, "The policy authorities of the United States and China will not tolerate situations such as power shortages," and added, "Once uncertainty is resolved, stock prices could rebound quickly."