"Big Banks" Bank of America Securities: Container shipping has not yet passed the worst period, maintaining a "underperform" rating for COSCO Ship Hold and OOIL

Bank of America Securities published a research report stating that container shipping has not yet passed its worst period, and the pressure from excess supply and the reopening of the Red Sea route is likely to lead to EBIT losses in 2026. The bank expects that the first half of 2026 will be dragged down by a significant increase in vessel supply, while the second half will face increasing pressure from the prospects of the Red Sea reopening.

The bank believes that losses will prompt container shipping companies to reduce shareholder returns in 2026 to preserve cash during the downturn.

The bank maintains a "Underperform" rating on COSCO Ship Hold (01919.HK), OOIL (00316.HK), and Evergreen Marine (2603.TW), and a "Neutral" rating on Japanese shipping companies, as current valuations remain above historical lows. Close attention should be paid to negative news regarding the restoration of the Red Sea route, as well as the risk of further declines in spot freight rates as port congestion eases and seasonal factors weaken