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CICC raises Pacific Basin target price by 33.5%, bullish on freight rate uptrend
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Pacific Basin Shipping (02343) shares rose over 5% intraday and closed up 4.21% at HK$4.33, with turnover of HK$35.98 million. The rally comes amid escalating tensions in the Bab el-Mandeb Strait, adding to the ongoing Strait of Hormuz crisis. Shipbroker Gibson reported that VLCC rates have reached unprecedented levels, with the TD3C route surging above $1.24 million per day. CICC released a research note raising its 2026/2027 earnings forecasts for Pacific Basin by 37.1% and 42.7% to $241 million and $257 million respectively, citing better-than-expected freight rates. The bank maintains an 'outperform' rating and raised its target price by 33.5% to HK$4.54, implying 9.66% upside from the current price. CICC noted that small dry bulk freight rates continue to rise, with the BSI and BHSI indices up 2.9% and 5.3% week-on-week respectively, and 18.1% and 21.7% year-on-year. The bank is organizing a non-deal roadshow for the company this Friday and expects strong full-year profitability driven by rising freight rates.
Source report
Pacific Basin Shipping (02343) saw its share price surge more than 5% during intraday trading. As of the time of writing, the stock was up 4.21%, trading at HK$4.33, with a turnover of HK$35.981 million.
Geopolitical Tensions Escalate in Key Shipping Routes
According to Shipping Herald, while the Strait of Hormuz remains in a state of uncertainty, tensions in the Bab el-Mandeb Strait have escalated sharply. Shipbroker Gibson reported that the VLCC market has reached unprecedented levels, with TD3C rates surging to over US$1.24 million per day.
CICC Upgrades Earnings Forecast and Target Price
CICC released a research note stating that, given recent freight rates exceeding its expectations, it has raised its earnings forecasts for Pacific Basin Shipping for 2026 and 2027 by 37.1% and 42.7%, to US$241 million and US$257 million, respectively. At the current share price, this implies a P/E ratio of 11.4x for 2026 and 10.7x for 2027.
The investment bank maintained a "Outperform" rating and raised its target price by 33.5% to HK$4.54 per share, corresponding to a P/E ratio of 12.5x for 2026 and 11.7x for 2027. This represents a potential upside of 9.66% from the current share price.
CICC also noted that it organized a non-deal roadshow for the company this Friday. Recent small dry bulk freight rates have continued to rise. As of September 17, the BSI and BHSI freight indices increased by 2.9% and 5.3% week-on-week, respectively, and by 18.1% and 21.7% year-on-year. The bank is optimistic that the company will benefit from the upward trend in freight rates and achieve strong profitability for the full year.
Source
和讯基金Eastern
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Pacific Basin Shipping surges 5% as Middle East tensions drive VLCC rates above $1.24 million per day