COSCO SHIP ENGY (01138) saw its share price rise by 5.91% in early trading, currently quoted at HKD 13.62, with a turnover of HKD 197 million.

Caitong Securities released a research report stating that, benefiting from their scaled tanker fleets, both China Merchants Energy Shipping and COSCO SHIP ENGY exhibit significant earnings flexibility. Taking VLCCs as an example, for every USD 10,000 per day increase in TCE, the annualized net profit of China Merchants Energy Shipping and COSCO SHIP ENGY is expected to increase by approximately CNY 1.1 billion and CNY 950 million, respectively. The report pointed out that reviewing the peak cycles of the tanker shipping industry over the past decade, and based on iFinD consensus expectations, under the profit forecast methodology, the P/E ratio after earnings revisions generally reaches 13-15x; currently, the valuation of A-share listed tanker companies still has room for improvement. If supply and demand in the compliant market further improve, it is expected to further enhance the valuation of tanker companies, while also highlighting the discount opportunities for related targets in the Hong Kong stock market.