Shares of Pacific Basin (02343) have risen more than 4%. At the time of writing, the stock is up 3.5% to HK$2.96, with a turnover of HK$14.3171 million.

In terms of news, a research report from HSBC Research noted that while freight rates for Pacific Basin have increased since the Middle East conflict, its share price performance has lagged behind peers and the local Hang Seng Index. However, the bank believes that due to long-haul trade and rerouting increasing ton-mile demand, coupled with supply constraints from supply chain disruptions, Pacific Basin is expected to deliver a strong performance in the first half of this year, with an even stronger performance in the second half.

Furthermore, the company's projected dividend yield for 2026 (including share buybacks) is around 10%, which is considered attractive. In response to the more robust freight rate outlook, HSBC Research has upgraded its investment rating on Pacific Basin from "Hold" to "Buy".

HSBC Research indicated that the supply and demand dynamics for dry bulk shipping are roughly balanced, unlike the overcapacity seen in the container shipping sector. While the nominal dry bulk fleet has grown, the actual effective supply may be tighter. At the same time, freight rates for Supramax and Handysize vessels, which are core to Pacific Basin's operations, have shown resilience.

The bank has raised its forecast for the company's recurring profits for 2026 to 2028 by 28% to 34% and expects recurring profit for the first half of this year to increase nearly threefold year-on-year, doubling half-on-half to US$63 million.