[Click eStock] HMM, Faster-Than-Expected Peak Out

[Asia Economy Reporter Junho Hwang] Daishin Securities lowered the target price of HMM to 29,000 KRW on the 11th, citing the company's poor performance.

Daishin Securities pointed to a decrease in container shipping volume (down 3% compared to the previous quarter) as a reason for HMM's decline in earnings in the second quarter of this year.

The container shipping volume in the second quarter of this year recorded 8.924 million TEU, falling short of the company's estimate of 10.21 million TEU by 12.6%. This was attributed to the Shanghai lockdown in China, intensified port congestion surcharges, and a slowdown in global container cargo volume.

The average revenue per container (ARPT) also decreased by 0.8% compared to the previous quarter, recording $4,176.2 per TEU. This was due to an increase in the proportion of shipping volume on Asian and North-South routes, which have lower freight rates compared to the Americas and Europe, as well as declines in freight rates on Asian and North-South routes (down 5.9% and 2.9% respectively compared to the first quarter).

Additionally, it was analyzed that the results fell short of expectations due to increased charter fees and fuel costs.

Ji-hwan Yang, a researcher at Daishin Securities, stated, "The average Shanghai Containerized Freight Index (SCFI) for the third quarter is 4007.6 points (down 4.8% compared to the previous quarter), SCFI Europe is $5,532 (down 7.2% compared to the previous quarter), and SCFI USWC is $6,874 per FEU (down 11.6% compared to the previous quarter)," adding, "A decline in earnings is expected in the third quarter as well."