M Stanley: OOIL (00316.HK) Reports Expected 4Q Revenue Drop, Maintains Underweight Rating
Revenue Decline: OOIL reported a 17.2% year-over-year and 8.1% quarter-over-quarter decline in 4Q revenue, aligning with Morgan Stanley's expectations and reflecting ongoing downward pressure on shipping rates.
Future Projections: Morgan Stanley forecasts OOIL's earnings per share (EPS) for 2025-2027 to be USD2.06, USD1.23, and USD0.94, with annual revenue estimates of USD9.721 billion, USD9.567 billion, and USD9.869 billion.
Market Outlook: The broker anticipates that the downcycle in the shipping sector will continue until 2026, despite seasonal demand before the Lunar New Year.
Rating and Target Price: Morgan Stanley maintains an Underweight rating for OOIL, setting a target price of HKD97.
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BofAS Maintains Underperform Rating on COSCO SHIP HOLD/OOIL as Container Shipping Sector Still Faces Challenges
Industry Outlook: The container shipping industry is expected to face challenges, with BofA Securities predicting an EBIT loss in 2026 due to oversupply and the reopening of the Red Sea route.
Vessel Supply Impact: Significant growth in vessel supply in the first half of 2026 will contribute to the industry's struggles, compounded by the reopening of the Red Sea route in the second half of the year.
Investment Recommendations: BofA Securities has maintained an Underperform rating on COSCO SHIP HOLD and OOIL, advising investors to be cautious of negative developments related to the Red Sea route.
Market Conditions: The report highlights the potential for declining spot freight rates as port congestion eases and seasonal factors weaken, which could further impact the shipping market.
<Daily Summary> HSI Ends at 26,844, Decreasing by 78 Points; HSTI Finishes at 5,822, Down 6 Points; POP MART Falls Over 5%; CKH HOLDINGS, SHK PPT, CONANT OPTICAL, HUA HONG SEMI, and CHERVON Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 78 points (0.3%) to close at 26,844, while the Hang Seng China Enterprises Index (HSCEI) dropped 46 points (0.5%) to 9,220, with a total market turnover of $255.08 billion.
Active Heavyweights: Notable declines were seen in Xiaomi (-2.0%), Ping An (-1.3%), and Tencent (-0.7%), while Alibaba experienced a slight increase of 1.0%.
Significant Movers: Pop Mart saw a significant drop of 5.6%, while Techtronic Industries and Li Ning reported gains of 4.9% and 4.3%, respectively, with some stocks hitting new highs.
Top Gainers in HSMI & HSSI: Synagistics surged by 17.8%, followed by XXF with a 13.1% increase, and several other stocks also reported substantial gains, indicating a mixed performance across different sectors.
Midday Update: HSI Ends at 26,851, Down 71 Points; HSTI at 5,815, Down 12 Points; ALI HEALTH Falls Over 5%; SHK PPT, CKH HOLDINGS, CLP HOLDINGS, BOC HONG KONG, and CONANT OPTICAL Reach New Highs
Market Performance: The Hang Seng Index (HSI) fell by 71 points (0.3%) to 26,851, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Notable movements included Xiaomi and Ping An, both down approximately 1.6%, while Alibaba saw a slight increase of 1.1%.
Significant Declines: Ali Health and Pop Mart faced substantial drops of 6.3% and 4.8%, respectively, with Pop Mart experiencing high short selling activity.
Top Gainers: Techtronic Industries and Li Ning reported gains of 4.8% and 4.0%, respectively, with several companies hitting new highs in their stock prices.
HSBC Research: Reopening of Red Sea Shipping Route Expected to Reduce Freight Rates; COSCO SHIP HOLD and OOIL Remain Underweight
Resumption of Shipping Routes: Maersk will resume its shipping route from India and the Middle East to the US East Coast via the Red Sea and Suez Canal, following similar moves by CMA CGM and the Ocean Alliance.
Impact on Freight Rates: The resumption of these routes is expected to increase shipping capacity by 7-8%, leading to a forecasted decline in freight rates by 9-16% this year, contingent on ongoing disruptions in the Red Sea.
Financial Risks for Shipping Companies: A potential 10% drop in freight rates could significantly impact Maersk's EBIT margin, resulting in losses for both Maersk and Hapag-Lloyd.
Investment Ratings: HSBC Global Investment Research has assigned a Buy rating to Maersk due to its logistics and terminal operations, while maintaining Underweight ratings for COSCO SHIP HOLD and OOIL, and a Hold rating for SITC.
<M Stanley Analysis> Ratings and Target Prices for Airlines, Shipping Companies, and Express Delivery Services (Table)
Airline Stock Performance: Air China, China Southern Airlines, and China Eastern Airlines experienced declines in share prices, while BOC Aviation and Travelsky Tech saw slight increases, with most airlines rated as "Overweight" by analysts.
Short Selling Activity: Significant short selling was noted across various airlines, with China Southern Airlines having the highest ratio at 18.053%, indicating investor skepticism about future performance.
Express Delivery Platforms: ZTO Express is rated "Overweight," while J&T Express and JD Logistics faced minor declines, with both rated as "Equalweight."
Shipping Sector Overview: COSCO Ship Energy showed a positive performance with a 3.431% increase, while other shipping companies like SITC and OOIL experienced declines, with varying ratings from "Overweight" to "Underweight."
M Stanley Assigns Overweight Ratings to 3 Major Chinese Airlines, Focusing on Supply-Side Prospects in Aviation, Shipping, and Courier Sectors
Morgan Stanley's Transportation Report: The report highlights that despite a soft macroeconomic outlook, the transportation market in mainland China and Hong Kong will face more opportunities than risks, focusing on supply chain constraints and market consolidation in various sectors.
Aviation Industry Ratings: Morgan Stanley has rated several airlines, including AIR CHINA, CHINA EAST AIR, CHINA SOUTH AIR, and SPRING AIRLINES, as Overweight with specific target prices, indicating a positive outlook for these stocks.
Shipping Stocks Outlook: The report expresses a bearish stance on COSCO SHIP HOLD and OOIL, rating them as Underweight, while giving an Overweight rating to COSCO SHIP ENGY and MERCHANTS SHIPPING, suggesting a more favorable view on these companies.
Courier Industry Assessment: J&T EXPRESS-W is rated as Equalweight, with expectations for market share expansion in its operating regions, reflecting a cautious but optimistic outlook for the courier sector.
BofAS Maintains Underperform Rating on COSCO SHIP HOLD/OOIL as Container Shipping Sector Still Faces Challenges
Industry Outlook: The container shipping industry is expected to face challenges, with BofA Securities predicting an EBIT loss in 2026 due to oversupply and the reopening of the Red Sea route.
Vessel Supply Impact: Significant growth in vessel supply in the first half of 2026 will contribute to the industry's struggles, compounded by the reopening of the Red Sea route in the second half of the year.
Investment Recommendations: BofA Securities has maintained an Underperform rating on COSCO SHIP HOLD and OOIL, advising investors to be cautious of negative developments related to the Red Sea route.
Market Conditions: The report highlights the potential for declining spot freight rates as port congestion eases and seasonal factors weaken, which could further impact the shipping market.
<Daily Summary> HSI Ends at 26,844, Decreasing by 78 Points; HSTI Finishes at 5,822, Down 6 Points; POP MART Falls Over 5%; CKH HOLDINGS, SHK PPT, CONANT OPTICAL, HUA HONG SEMI, and CHERVON Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 78 points (0.3%) to close at 26,844, while the Hang Seng China Enterprises Index (HSCEI) dropped 46 points (0.5%) to 9,220, with a total market turnover of $255.08 billion.
Active Heavyweights: Notable declines were seen in Xiaomi (-2.0%), Ping An (-1.3%), and Tencent (-0.7%), while Alibaba experienced a slight increase of 1.0%.
Significant Movers: Pop Mart saw a significant drop of 5.6%, while Techtronic Industries and Li Ning reported gains of 4.9% and 4.3%, respectively, with some stocks hitting new highs.
Top Gainers in HSMI & HSSI: Synagistics surged by 17.8%, followed by XXF with a 13.1% increase, and several other stocks also reported substantial gains, indicating a mixed performance across different sectors.
Midday Update: HSI Ends at 26,851, Down 71 Points; HSTI at 5,815, Down 12 Points; ALI HEALTH Falls Over 5%; SHK PPT, CKH HOLDINGS, CLP HOLDINGS, BOC HONG KONG, and CONANT OPTICAL Reach New Highs
Market Performance: The Hang Seng Index (HSI) fell by 71 points (0.3%) to 26,851, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Notable movements included Xiaomi and Ping An, both down approximately 1.6%, while Alibaba saw a slight increase of 1.1%.
Significant Declines: Ali Health and Pop Mart faced substantial drops of 6.3% and 4.8%, respectively, with Pop Mart experiencing high short selling activity.
Top Gainers: Techtronic Industries and Li Ning reported gains of 4.8% and 4.0%, respectively, with several companies hitting new highs in their stock prices.
HSBC Research: Reopening of Red Sea Shipping Route Expected to Reduce Freight Rates; COSCO SHIP HOLD and OOIL Remain Underweight
Resumption of Shipping Routes: Maersk will resume its shipping route from India and the Middle East to the US East Coast via the Red Sea and Suez Canal, following similar moves by CMA CGM and the Ocean Alliance.
Impact on Freight Rates: The resumption of these routes is expected to increase shipping capacity by 7-8%, leading to a forecasted decline in freight rates by 9-16% this year, contingent on ongoing disruptions in the Red Sea.
Financial Risks for Shipping Companies: A potential 10% drop in freight rates could significantly impact Maersk's EBIT margin, resulting in losses for both Maersk and Hapag-Lloyd.
Investment Ratings: HSBC Global Investment Research has assigned a Buy rating to Maersk due to its logistics and terminal operations, while maintaining Underweight ratings for COSCO SHIP HOLD and OOIL, and a Hold rating for SITC.
<M Stanley Analysis> Ratings and Target Prices for Airlines, Shipping Companies, and Express Delivery Services (Table)
Airline Stock Performance: Air China, China Southern Airlines, and China Eastern Airlines experienced declines in share prices, while BOC Aviation and Travelsky Tech saw slight increases, with most airlines rated as "Overweight" by analysts.
Short Selling Activity: Significant short selling was noted across various airlines, with China Southern Airlines having the highest ratio at 18.053%, indicating investor skepticism about future performance.
Express Delivery Platforms: ZTO Express is rated "Overweight," while J&T Express and JD Logistics faced minor declines, with both rated as "Equalweight."
Shipping Sector Overview: COSCO Ship Energy showed a positive performance with a 3.431% increase, while other shipping companies like SITC and OOIL experienced declines, with varying ratings from "Overweight" to "Underweight."
M Stanley Assigns Overweight Ratings to 3 Major Chinese Airlines, Focusing on Supply-Side Prospects in Aviation, Shipping, and Courier Sectors
Morgan Stanley's Transportation Report: The report highlights that despite a soft macroeconomic outlook, the transportation market in mainland China and Hong Kong will face more opportunities than risks, focusing on supply chain constraints and market consolidation in various sectors.
Aviation Industry Ratings: Morgan Stanley has rated several airlines, including AIR CHINA, CHINA EAST AIR, CHINA SOUTH AIR, and SPRING AIRLINES, as Overweight with specific target prices, indicating a positive outlook for these stocks.
Shipping Stocks Outlook: The report expresses a bearish stance on COSCO SHIP HOLD and OOIL, rating them as Underweight, while giving an Overweight rating to COSCO SHIP ENGY and MERCHANTS SHIPPING, suggesting a more favorable view on these companies.
Courier Industry Assessment: J&T EXPRESS-W is rated as Equalweight, with expectations for market share expansion in its operating regions, reflecting a cautious but optimistic outlook for the courier sector.
