DBS analyst Paul Yong maintained a Buy rating on CSSC (Hong Kong) Shipping Company Limited (3LL – Research Report) today and set a price target of HK$2.50.
Paul Yong has given his Buy rating due to a combination of factors that highlight CSSC (Hong Kong) Shipping Company Limited’s strong market position and growth potential. The company is expected to achieve a steady earnings growth rate of 9% CAGR from FY24 to FY26, maintaining a robust return on equity above 15%. This growth is supported by CSSC’s strategic positioning in both long-term contracts and short-term spot markets, which provides earnings stability and flexible returns.
Additionally, CSSC’s recent re-entry into the HK Stock Connect and an anticipated increase in dividend payout are seen as positive catalysts for the stock. The company has shown resilience in a challenging ship leasing market by outperforming in new vessel leases, which is expected to drive future earnings. The potential recovery in tanker freight rates in late 2024 further supports the positive outlook, justifying the Buy rating and the increased target price to HKD2.5, suggesting a significant upside potential.