<Research> JPM: Transformation of Asian Supply Chains; COSCO SHIP HOLD, OOIL, and CATHAY PAC AIR Preferred
Impact of Middle East Crisis: The ongoing Middle East crisis and Iran's closure of the Strait of Hormuz are significantly altering the Asian transportation and industrial landscape, driven by geopolitical shocks and changing trade dynamics, according to a JP Morgan report.
Opportunities for Key Industries: Companies in container shipping, tankers, bulk shipping, ports, supply chains, and defense are capitalizing on new opportunities due to their scale, flexibility, and strategic positioning, with the defense sector entering a structural upcycle.
Shift to Air Freight: As maritime bottlenecks increase, shippers are increasingly turning to air freight, benefiting airlines like Cathay Pacific and Singapore Airlines, which are well-positioned due to their fuel hedging strategies and established route networks.
Favorable Ratings for Shipping and Airlines: JP Morgan has favored companies like COSCO, OOIL, and Evergreen Marine in the container shipping sector for their global scale, while assigning an Overweight rating to Cathay Pacific and Singapore Airlines in the airline sector.
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HSI Drops 251 Points; Banking Sector Faces Pressure; MTR Corporation and OOIL Decline After Earnings Reports
Market Performance: The HSI closed down 251 points (1%) at 25,465, with significant declines in major stocks like HSBC and Standard Chartered, both dropping over 5%.
Inflation and Economic Indicators: China's inflation rate for February rose to 1.0%, while the M2 money supply remained unchanged at 9% year-on-year.
Commodity and Airline Stocks: CNOOC saw a 2.3% increase amid rising oil prices, while airline stocks like China Southern Airlines and Air China fell over 4%.
Tech Stock Movements: Major tech companies like Tencent and Alibaba experienced slight gains, while others like Meituan and Kuaishou saw declines of around 1-1.7%.
HSI Declines 123 Points at Noon; SWIRE PACIFIC A Increases by 5%; MTR CORPORATION Drops Over 6%
Market Performance: The HSI closed down 123 points (0.5%) at 25,593, with significant declines in major financial stocks like HSBC and Standard Chartered, while the total market turnover reached HKD126.059 billion.
Sector Movements: Oil stocks like PetroChina and CNOOC saw gains due to rising oil prices, while gold stocks and airlines experienced declines amid fluctuating market conditions.
Corporate Developments: Swire Group plans to raise HKD1.79 billion by selling a stake in Cathay Pacific, which saw a drop in its stock price, while Swire Pacific A's stock rose after announcing an increased dividend.
Tech Stock Trends: Major tech companies like Tencent and Alibaba saw slight increases, while others like Meituan and Kuaishou experienced minor declines, reflecting mixed performance in the tech sector.
CLSA Raises Target Price for SWIRE PACIFIC A (00019.HK) to $91, Maintains Outperform Rating
SWIRE PACIFIC Performance: SWIRE PACIFIC reported a 11% year-on-year increase in recurring profit to $5 billion for 2H25, exceeding expectations, with a final dividend per share of $2.5, up 19% YoY.
Broker Forecasts: CLSA raised its recurring profit forecasts for SWIRE PACIFIC for 2026 and 2027 by 8% and 7% respectively, and increased its target price from $74 to $91, maintaining an Outperform rating.
SWIREPROPERTIES and CATHAY PAC AIR: CLSA noted favorable conditions for profit growth in SWIREPROPERTIES and highlighted risks related to fuel costs for CATHAY PAC AIR, which is currently rated as Underperform.
Short Selling Data: As of March 12, 2026, SWIRE PACIFIC had a short selling ratio of 26.489%, while CATHAY PAC AIR had a higher ratio of 30.801%.
CLSA Reports: SWIRE PACIFIC A Offloads CX Shares at 9.6% Discount, Anticipates Shareholding Changes
SWIRE PACIFIC A Share Placement: SWIRE PACIFIC A announced a placement of 153 million shares of CATHAY PAC AIR at $11.74 per share, a 9.6% discount to the previous closing price, aiming to adjust its stake in the airline.
Financial Impact: The placement will result in net proceeds of $1.789 billion for SWIRE PACIFIC A and a disposal gain of $365 million, with the completion expected by March 17.
Market Reactions: CLSA's report indicates that the placement price reflects a projected PB ratio of 1.2x for 2027, which may be viewed negatively by the market.
Short Selling Data: As of March 12, short selling for SWIRE PACIFIC A was $45.19 million with a ratio of 26.489%, while CATHAY PAC AIR had short selling of $77.13 million and a ratio of 30.801%.
BofAS: SWIRE PACIFIC A's Dividend Increase Sends Positive Signal; Current Valuation Appealing
Swire Group's Financial Performance: Swire Group's 2025 results exceeded expectations, highlighted by a surprising 13% increase in dividends per share, reinforcing its strong track record in shareholder returns.
Dividend Policy Outlook: Management believes in the sustainability of its progressive dividend policy, expecting stable single-digit annual growth in dividends per share, while share buybacks will be a secondary option.
SWIREPROPERTIES Valuation: BofA Securities is optimistic about SWIREPROPERTIES, noting its current share price is at a 30% discount to net asset value, making it an attractive investment compared to historical averages.
CATHAY PAC AIR Performance Impact: Despite rising oil prices affecting CATHAY PAC AIR's earnings outlook, Swire Group's dividend policy remains unaffected by the airline's performance, with BofA maintaining a Buy rating on SWIRE PACIFIC A.
CATHAY PAC AIR Falls 3.8% Following SWIRE PACIFIC A's Stake Reduction at a 9.6% Discounted Price
CATHAY PAC AIR Performance: CATHAY PAC AIR shares opened 3% lower, hitting a low of HKD12.38, and last traded at HKD12.5, down 3.77% with significant turnover of HKD1.846 billion.
SWIRE PACIFIC A Stake Reduction: SWIRE PACIFIC A announced a plan to sell 2.52% of its stake in CATHAY PAC AIR, reducing its shareholding from 47.64% to approximately 45.12% after the placement of 153 million shares at HKD11.74 each.
Short Selling Data: CATHAY PAC AIR experienced short selling of $77.13 million with a ratio of 30.801%, while SWIRE PACIFIC A had short selling of $45.19 million and a ratio of 26.489%.
Financial Highlights: CATHAY PAC AIR reported a 9.5% increase in full-year net profit to $10.828 billion, and raised its second interim dividend per share by 30.6% to $0.64.
HSI Drops 251 Points; Banking Sector Faces Pressure; MTR Corporation and OOIL Decline After Earnings Reports
Market Performance: The HSI closed down 251 points (1%) at 25,465, with significant declines in major stocks like HSBC and Standard Chartered, both dropping over 5%.
Inflation and Economic Indicators: China's inflation rate for February rose to 1.0%, while the M2 money supply remained unchanged at 9% year-on-year.
Commodity and Airline Stocks: CNOOC saw a 2.3% increase amid rising oil prices, while airline stocks like China Southern Airlines and Air China fell over 4%.
Tech Stock Movements: Major tech companies like Tencent and Alibaba experienced slight gains, while others like Meituan and Kuaishou saw declines of around 1-1.7%.
HSI Declines 123 Points at Noon; SWIRE PACIFIC A Increases by 5%; MTR CORPORATION Drops Over 6%
Market Performance: The HSI closed down 123 points (0.5%) at 25,593, with significant declines in major financial stocks like HSBC and Standard Chartered, while the total market turnover reached HKD126.059 billion.
Sector Movements: Oil stocks like PetroChina and CNOOC saw gains due to rising oil prices, while gold stocks and airlines experienced declines amid fluctuating market conditions.
Corporate Developments: Swire Group plans to raise HKD1.79 billion by selling a stake in Cathay Pacific, which saw a drop in its stock price, while Swire Pacific A's stock rose after announcing an increased dividend.
Tech Stock Trends: Major tech companies like Tencent and Alibaba saw slight increases, while others like Meituan and Kuaishou experienced minor declines, reflecting mixed performance in the tech sector.
CLSA Raises Target Price for SWIRE PACIFIC A (00019.HK) to $91, Maintains Outperform Rating
SWIRE PACIFIC Performance: SWIRE PACIFIC reported a 11% year-on-year increase in recurring profit to $5 billion for 2H25, exceeding expectations, with a final dividend per share of $2.5, up 19% YoY.
Broker Forecasts: CLSA raised its recurring profit forecasts for SWIRE PACIFIC for 2026 and 2027 by 8% and 7% respectively, and increased its target price from $74 to $91, maintaining an Outperform rating.
SWIREPROPERTIES and CATHAY PAC AIR: CLSA noted favorable conditions for profit growth in SWIREPROPERTIES and highlighted risks related to fuel costs for CATHAY PAC AIR, which is currently rated as Underperform.
Short Selling Data: As of March 12, 2026, SWIRE PACIFIC had a short selling ratio of 26.489%, while CATHAY PAC AIR had a higher ratio of 30.801%.
CLSA Reports: SWIRE PACIFIC A Offloads CX Shares at 9.6% Discount, Anticipates Shareholding Changes
SWIRE PACIFIC A Share Placement: SWIRE PACIFIC A announced a placement of 153 million shares of CATHAY PAC AIR at $11.74 per share, a 9.6% discount to the previous closing price, aiming to adjust its stake in the airline.
Financial Impact: The placement will result in net proceeds of $1.789 billion for SWIRE PACIFIC A and a disposal gain of $365 million, with the completion expected by March 17.
Market Reactions: CLSA's report indicates that the placement price reflects a projected PB ratio of 1.2x for 2027, which may be viewed negatively by the market.
Short Selling Data: As of March 12, short selling for SWIRE PACIFIC A was $45.19 million with a ratio of 26.489%, while CATHAY PAC AIR had short selling of $77.13 million and a ratio of 30.801%.
BofAS: SWIRE PACIFIC A's Dividend Increase Sends Positive Signal; Current Valuation Appealing
Swire Group's Financial Performance: Swire Group's 2025 results exceeded expectations, highlighted by a surprising 13% increase in dividends per share, reinforcing its strong track record in shareholder returns.
Dividend Policy Outlook: Management believes in the sustainability of its progressive dividend policy, expecting stable single-digit annual growth in dividends per share, while share buybacks will be a secondary option.
SWIREPROPERTIES Valuation: BofA Securities is optimistic about SWIREPROPERTIES, noting its current share price is at a 30% discount to net asset value, making it an attractive investment compared to historical averages.
CATHAY PAC AIR Performance Impact: Despite rising oil prices affecting CATHAY PAC AIR's earnings outlook, Swire Group's dividend policy remains unaffected by the airline's performance, with BofA maintaining a Buy rating on SWIRE PACIFIC A.
CATHAY PAC AIR Falls 3.8% Following SWIRE PACIFIC A's Stake Reduction at a 9.6% Discounted Price
CATHAY PAC AIR Performance: CATHAY PAC AIR shares opened 3% lower, hitting a low of HKD12.38, and last traded at HKD12.5, down 3.77% with significant turnover of HKD1.846 billion.
SWIRE PACIFIC A Stake Reduction: SWIRE PACIFIC A announced a plan to sell 2.52% of its stake in CATHAY PAC AIR, reducing its shareholding from 47.64% to approximately 45.12% after the placement of 153 million shares at HKD11.74 each.
Short Selling Data: CATHAY PAC AIR experienced short selling of $77.13 million with a ratio of 30.801%, while SWIRE PACIFIC A had short selling of $45.19 million and a ratio of 26.489%.
Financial Highlights: CATHAY PAC AIR reported a 9.5% increase in full-year net profit to $10.828 billion, and raised its second interim dividend per share by 30.6% to $0.64.
