UBS upgrades COSCO Ship Hold A-share rating to "Neutral," target price raised to 15.4 RMB

UBS stated that recently, China and the United States unexpectedly announced a one-year suspension of mutual port service fees. The bank expects that these fees will eventually be completely eliminated, which is slightly positive for COSCO Ship Hold (01919.HK). Although the reopening of the Red Sea may pose a downside risk to freight rates, the bank believes that the group's strong cash position (equivalent to 70% of its market value) and robust dividend yield can support the stock price.

The bank raised its earnings per share forecasts for 2025 to 2027 by 5% to 66%, as the freight volume and freight rate performance in the first three quarters of this year exceeded expectations, coupled with slight improvements in U.S. tariff policies, supporting freight volumes for the fourth quarter of this year and next year. Additionally, the U.S. suspension of port service fees will reduce operating costs. The bank upgraded COSCO Ship Hold A shares (601919.SH) to "Neutral," raising the target price from RMB 11.2 to RMB 15.4