Citi published a report maintaining its view that inventory restocking in Western economies should continue to drive shipping demand in 2H26, in line with guidance from Germany's Hapag Lloyd during its 2Q earnings conference call. In addition, despite annual new supply growth of around 12% in each of the next two years, the container shipping industry should be able to maintain freight rates at levels above post-tax earnings breakeven. Citi expects Evergreen Marine (2603.TW), COSCO SHIP HOLD (01919.HK) -0.560 (-3.122%) Short selling $116.17M; Ratio 23.227% H shares and Wan Hai (2615.TW) to achieve return on equity (ROE) that is 4 ppts higher during 2026-28E than the other three Asia-Pacific shipping companies under its coverage.

Citi initiated coverage on Wan Hai, its sector top pick, and Regional Container Lines (RCL.BK) with Buy ratings and target prices of TWD141 and THB60 respectively, citing Wan Hai's net cash position and undemanding valuation at only 1x forecast next-year PB ratio against 12% ROE, while RCL trades at 0.6x PBV against 8% ROE. Citi favors their expansion strategies beyond the fragmented intra-Asia market.

Citi downgraded COSCO SHIP HOLD (01919.HK) -0.560 (-3.122%) Short selling $116.17M; Ratio 23.227% H shares to Neutral from Buy and raised its TP from HKD15.9 to HKD17.4. Evergreen Marine was downgraded to Neutral from Buy, with TP slightly raised from TWD251 to TWD253. Citi also initiated coverage on South Korea's HMM (011200.KS) with a Neutral rating and TP of KRW22,668. Yang Ming (2609.TW) was downgraded to Neutral from Buy, with TP raised from TWD68 to TWD70. (da/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-24 16:25.)