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COSCO Shipping Energy expected its first-half net profit to reach 2.65 trillion yuan, higher than expectations, benefiting from the lag effect of strong VLCC rates in March this year and lower fuel costs, BofA Securities said in a research note.
The bank raised the forecast of the company’s operating profit in 2023 – 2025 by an average of about 20%, and expected its operating profit to be flat in the second half of the year with the first half, mainly due to weaker spot rates in May, as well as short-term Saudi Arabia’s production cuts in July and other unfavorable factors.
It noted that the seasonal factors for the company are expected to improve from the end of this year, it said.
The bank raised its target price of COSCO Shipping Energy from HK$10.35 to HK$12 and maintained a Buy rating.