[Click eStock] "HMM, Short-Term Cycle Arrives... Freight Rates Expected to Remain Strong"

Daishin Securities forecasted on the 28th that HMM's freight rates will remain strong for the time being due to a short-term cycle emerging amid the recession. They maintained the investment rating at 'Market Perform' and raised the target price from the previous 17,000 KRW to 20,000 KRW.

Yang Ji-hwan, a researcher at Daishin Securities, stated, "The Shanghai Containerized Freight Index (SCFI) has continued to rise since April this year, reaching 2,703 points on the 24th, which is the highest level since September 2, 2022." He added, "The recent increase in freight rates is related to the Red Sea incident, which caused most shipping companies to adopt the Africa Cape of Good Hope detour route, increasing sailing distances, and making it difficult for shippers to secure bookings." He explained, "As the round-trip time per voyage has lengthened, peak season orders started earlier than in previous years."

He further analyzed, "Even if the Suez Canal returns to normal, shipping companies may not revert to their previous routes," adding, "This is because adopting the Cape of Good Hope route provides justification for freight rate increases and has a significant supply absorption effect." He concluded, "Due to the short-term cycle emerging amid the recession, freight rates are expected to remain strong for the time being."