By Clarence Leong
Shares of Pacific Basin Shipping Ltd. rose strongly after its record-setting interim results, with profit nearly tripling from a year earlier thanks to solid global demand for commodities.
The company’s shares advanced 6.4% to HK$3.65 in Friday morning trade in Hong Kong, taking year-to-date gains to 28%.
The Hong Kong-based shipping company posted US$465.1 million net profit for the first six months, compared with US$160.1 million a year earlier, it said in a filing Thursday. Revenue for the period grew 51% to US$1.72 billion.
Pacific Basin Shipping said it expects dry bulk demand to “moderate somewhat from recent highs” in the second half, though it will remain relatively firm because of seasonal factors in the grain market, elevated coal demand and global infrastructure investment.
The company’s stock is U.S. investment bank Jefferies’s top pick within the shipping sector. Analyst Andrew Lee said in a note that dry bulk volumes can benefit from the grain season and China’s potential infrastructure stimulus. Jefferies has a buy rating on the stock with a HK$5.60 target price.
Pacific Basin Shipping’s peers were also higher, with Cosco Shipping Holdings Co. gaining 2.1% and Orient Overseas (International) Ltd. adding 4.1%.
But the wider market was weaker. The city’s benchmark Hang Seng Index was recently 1.5% lower at 20308.68.
Write to Clarence Leong at [email protected]
