Core Viewpoint - The container shipping industry has not yet passed its worst period, with excess supply and the reopening of the Red Sea route likely leading to EBIT losses in 2026 [1] Group 1: Industry Outlook - Bank of America Securities predicts that the first half of 2026 will be heavily impacted by a significant increase in vessel supply [1] - The second half of 2026 is expected to face increasing pressure from the anticipated reopening of the Red Sea route [1] - The expected losses will likely lead container shipping companies to reduce shareholder returns in 2026 to preserve cash during the downturn [1] Group 2: Company Ratings - The bank maintains an "underperform" rating for COSCO Shipping Holdings, Orient Overseas, and Evergreen Marine [1] - A "neutral" rating is maintained for Japanese shipping companies due to current valuations being above historical lows [1] Group 3: Risks and Considerations - Close attention is required regarding negative news related to the restoration of the Red Sea route [1] - There is a risk of further declines in spot freight rates as port congestion eases and seasonal factors diminish [1]

Core Viewpoint - Citigroup has upgraded the rating of China COSCO Shipping Holdings (01919) from "Sell" to "Buy," raising the target price from HKD 12.1 to HKD 15.9, despite negative investment sentiment in the container shipping industry expected until the end of 2025 [6]. Group 1: Company Analysis - The upgrade reflects a positive outlook on the risk-return profile for shipping companies in the Asia-Pacific region [6]. - China COSCO Shipping Holdings has a net cash per share of HKD 12, which supports its valuation [6]. Group 2: Industry Outlook - The shipping industry is expected to face negative sentiment due to concentrated demand in the first half of 2025 and the resumption of traffic through the Suez Canal [6]. - Citigroup anticipates that freight rates will rise in the first half of 2026, driven by inventory replenishment demand in Western economies and managed supply [6]. - The overall valuation of Asia-Pacific shipping companies is attractive, with forecasted price-to-book ratios ranging from 0.6 to 0.8 times [6]. - The impact of weak domestic transportation demand in China and pressure from U.S. port fees is gradually diminishing [6].

Core Viewpoint - Citigroup upgraded the rating of China COSCO Shipping Holdings (01919) from "Sell" to "Buy," raising the target price from HKD 12.1 to HKD 15.9, despite negative investment sentiment in the container shipping industry expected until the end of 2025 [1] Group 1: Company Analysis - Citigroup believes that the risk-reward outlook for shipping companies in the Asia-Pacific region is positive [1] - China COSCO Shipping Holdings has a net cash per share of HKD 12, providing a strong financial foundation [1] - The impact of weak domestic transportation demand in China and pressure from U.S. port fees is gradually diminishing [1] Group 2: Industry Outlook - The container shipping industry is expected to face negative sentiment due to concentrated demand in the first half of 2025 and the restoration of traffic through the Suez Canal [1] - An anticipated increase in freight rates is expected in the first half of 2026, driven by inventory replenishment demand in Western economies and managed supply [1] - The current valuation of Asia-Pacific shipping companies is attractive, with projected price-to-book ratios ranging from 0.6 to 0.8 times [1]

Core Viewpoint - The Chongqing Municipal Government has signed a strategic cooperation agreement with China COSCO Shipping Group to enhance the construction of the Western Land-Sea New Corridor and develop an inland open comprehensive hub [1] Group 1: Strategic Cooperation - The agreement aims to deepen collaboration between China COSCO Shipping Group and Chongqing in areas such as the Western Land-Sea New Corridor and the cultivation of hub economy [1] - The signing is seen as a new starting point for further practical cooperation, particularly in promoting the "Chongqing vehicles going overseas" initiative [1] Group 2: Additional Agreements - Two additional cooperation agreements were signed on the same day between Liangjiang New Area and COSCO Shipping Logistics Supply Chain Co., Ltd., as well as between Jiangjin District and COSCO Shipping Container Transport Co., Ltd. [1]

Core Insights - The top three companies with the highest short positions as of January 9 are Vanke Enterprises (02202), Dongfang Electric (01072), and COSCO Shipping Holdings (01919), with short ratios of 18.74%, 17.39%, and 16.49% respectively [1][2] - The companies with the largest absolute increase in short positions are Goldwind Technology (02208), Zhaoyan New Drug (06127), and Jingtai Holdings (02228), with increases of 6.84%, 2.14%, and 1.85% respectively [1][2] - The companies with the largest absolute decrease in short positions are COSCO Shipping Energy (01138), Sanhua Intelligent Control (02050), and Huahong Semiconductor (01347), with decreases of -1.77%, -0.80%, and -0.71% respectively [1][3] Top 10 Short Positions - Vanke Enterprises (02202) has a short position of 413 million shares, representing a short ratio of 18.74% [2] - Dongfang Electric (01072) has a short position of 70.93 million shares, with a short ratio of 17.39% [2] - COSCO Shipping Holdings (01919) has a short position of 475 million shares, with a short ratio of 16.49% [2] - Other notable companies in the top 10 include Heng Rui Medicine (01276) at 15.19% and Ping An Insurance (02318) at 14.74% [2] Largest Increases in Short Positions - Goldwind Technology (02208) saw its short ratio increase from 4.35% to 11.18%, an increase of 6.84% [2] - Zhaoyan New Drug (06127) increased from 6.65% to 8.79%, an increase of 2.14% [2] - Jingtai Holdings (02228) increased from 3.34% to 5.19%, an increase of 1.85% [2] Largest Decreases in Short Positions - COSCO Shipping Energy (01138) decreased from 7.11% to 5.34%, a decrease of -1.77% [3] - Sanhua Intelligent Control (02050) decreased from 6.52% to 5.72%, a decrease of -0.80% [3] - Huahong Semiconductor (01347) decreased from 4.85% to 4.13%, a decrease of -0.71% [3]

Core Viewpoint - Despite negative investment sentiment in the container shipping industry until the end of 2025, driven by concentrated demand in the first half of 2025 and the restoration of traffic through the Suez Canal, the outlook for risk-reward in Asia-Pacific shipping companies is positive [1] Group 1: Market Outlook - The shipping industry is expected to see freight rates rise in the first half of 2026 due to inventory replenishment demand in Western economies and managed supply [1] - Current valuations for Asia-Pacific shipping companies are attractive, with forecasted price-to-book ratios ranging from 0.6 to 0.8 times [1] Group 2: Company Ratings - Citigroup upgraded the rating for China COSCO Shipping Holdings (H shares) from "Sell" to "Buy" [1] - The target price for China COSCO Shipping Holdings was raised from HKD 12.1 to HKD 15.9 [1]

Group 1 - The Hong Kong shipping stocks are generally declining, with notable drops in share prices [1] - Orient Overseas International (00316.HK) decreased by 3.72%, trading at HKD 121.7 [1] - Seaspan Corporation (01308.HK) fell by 2.93%, with shares priced at HKD 26.5 [1] - China COSCO Shipping Holdings (01919.HK) saw a decline of 2.77%, with shares at HKD 13.34 [1]

Core Viewpoint - The shipping sector is experiencing a downturn, with major companies like Orient Overseas International, Seaspan Corporation, and China COSCO Shipping Corporation seeing declines in their stock prices due to the anticipated impact of increased shipping capacity and falling freight rates following the resumption of routes through the Red Sea and Suez Canal by Maersk [1] Group 1: Market Reactions - Orient Overseas International (00316) shares fell by 3.72%, trading at 121.7 HKD [1] - Seaspan Corporation (01308) shares decreased by 2.93%, trading at 26.5 HKD [1] - China COSCO Shipping Corporation (601919) (01919) shares dropped by 2.77%, trading at 13.34 HKD [1] Group 2: Industry Developments - Maersk announced on January 15 that it will resume navigation through the Red Sea and Suez Canal as the security situation in the region stabilizes, marking a significant step towards normalcy in the shipping industry after two years of disruptions caused by Houthi attacks [1] - The return of vessels to the shorter Suez route is expected to increase shipping capacity by 7% to 8%, leading to downward pressure on freight rates [1] Group 3: Freight Rate Predictions - HSBC Global Research forecasts that freight rates could decline by 9% to 16% this year, assuming that disruptions in Red Sea shipping continue at least until mid-year [1] - The research indicates that there are downward risks to the current freight rate predictions [1]

Group 1 - The shipping sector is experiencing a general decline, with notable drops in stock prices for companies such as Orient Overseas International (00316) down 3.72% to HKD 121.7, Seaspan Corporation (01308) down 2.93% to HKD 26.5, and China COSCO Shipping Corporation (01919) down 2.77% to HKD 13.34 [1] - Danish shipping giant Maersk announced on January 15 that it will resume navigation through the Red Sea and Suez Canal as the security situation in the region stabilizes, marking a significant step towards normalcy in the shipping industry after two years of disruptions caused by Houthi attacks on vessels [1] - Market analysts predict that the return of vessels to the shorter Suez route may exert downward pressure on freight rates, with HSBC Global Research estimating a 7% to 8% increase in capacity, leading to a projected decline in freight rates by 9% to 16% this year [1]

Core Viewpoint - COSCO Shipping Holdings is steadily enhancing its fleet capacity by signing multiple shipbuilding agreements, which will significantly increase its operational capabilities and strengthen its market position [2][3][7]. Group 1: Shipbuilding Agreements - COSCO Shipping Holdings' wholly-owned subsidiary has signed a total of twelve shipbuilding agreements for twelve 18,000 TEU LNG dual-fuel container ships, with a total transaction value of RMB 16.788 billion [2][5][6]. - Additionally, the company has signed six agreements for six 3,000 TEU container ships, amounting to a total of RMB 1.98 billion [2][7]. - In total, COSCO Shipping Holdings announced the construction of 18 vessels in one day, with a combined cost of nearly RMB 18.8 billion [3][9]. Group 2: Fleet Capacity and Market Strategy - As of the end of the reporting period, COSCO Shipping Holdings operates a fleet of 557 self-owned container ships, with a total capacity exceeding 3.4 million TEUs, maintaining a leading position in the industry [5]. - The new vessels are expected to be delivered between 2028 and 2029, with plans to deploy them on major east-west trade routes to enhance service quality and optimize cost structures [6][7]. - The 3,000 TEU ships will be utilized for regional feeder operations, providing stable capacity and improving customer service capabilities in emerging and regional markets [8]. Group 3: Share Buyback and Dividend Distribution - COSCO Shipping Holdings has conducted two rounds of A-share buybacks in 2025, with a total expenditure of RMB 1.567 billion, reflecting the company's commitment to maintaining shareholder value [4][13]. - The company plans to repurchase between 50 million to 100 million A-shares at a maximum price of RMB 14.98 per share, with a total budget of up to RMB 1.498 billion for this buyback [11]. - In 2025, COSCO Shipping Holdings announced a mid-year cash dividend distribution of approximately RMB 8.674 billion, continuing its trend of high dividend payouts [14].