Zhi Tong Cai Jing·2025-12-22 03:07Core Viewpoint - Morgan Stanley's report indicates that the recent selling pressure on Pacific Basin Shipping (02343) appears to be an overreaction relative to its fundamentals, reaffirming an "Overweight" rating with a target price adjusted from HKD 3.2 to HKD 2.7, reflecting stable TCE and ongoing fleet growth [1] Group 1: Stock Performance and Market Factors - The recent weakness in the stock price is attributed to several factors, including the completion of the company's buyback program, market expectations of supply continuing to outpace demand leading to a weak outlook for next year, and a slowdown in Caravel's share acquisition, resulting in a lack of visible short-term catalysts [1] - Year-end profit-taking is also noted as a contributing factor to the stock's decline [1] Group 2: Demand and Supply Dynamics - Although demand growth for Handysize bulk carriers is slowing, it is expected to maintain a positive growth rate of 2% year-on-year next year, which will support capacity utilization [1] - The aging fleet poses a growing constraint, with 14% of Handysize and 12% of Supramax vessels over 20 years old, indicating that a further market downturn could lead to asymmetric responses on the supply side [1] Group 3: Valuation and Risk-Reward Ratio - After adjusting the valuation and target price, the risk-reward ratio is now considered more favorable [1]