CICC has maintained its 2026 net profit forecast for PACIFIC BASIN at US$176 million and introduced a 2027 net profit estimate of US$180 million for the first time. The current share price implies a price-to-earnings ratio of 11.9 times for 2026 and 11.5 times for 2027. The firm reiterated its Outperform rating on the stock. Considering improved risk appetite in the sector, CICC raised its target price by 41.67% to HK$3.4 per share, implying 12.9 times 2026 P/E and 12.5 times 2027 P/E, suggesting an 8.63% upside from the current price.

The company's 2025 results fell below CICC's expectations. PACIFIC BASIN reported revenue of US$2.081 billion, down 19% year-on-year, and a net profit attributable to shareholders of US$58 million, translating to basic earnings per share of 1.14 US cents, a decline of 56% compared to the previous year. The underperformance was mainly due to lower-than-expected Time Charter Equivalent rates achieved by the company. Although freight rates declined year-on-year due to industry-wide conditions, the company's rates remained above the market average. In 2025, the average daily earnings for its Handysize and Supramax vessels were US$11,490 and US$12,850 per day, respectively. While these figures represented declines of 11% and 6% year-on-year, they still exceeded the relevant market indices by 9% and 10%.

PACIFIC BASIN's 2025 dividend policy exceeded expectations. The company distributed a cash dividend of US$50.5 million, equivalent to 100% of its net profit after excluding gains from vessel sales. For 2026, the company has revised its dividend policy to distribute at least 50% of net profit, excluding gains from vessel sales, as dividends. If the company achieves a net cash position by year-end, the payout ratio could increase to a maximum of 100% of net profit after excluding vessel sale gains. Based on CICC's current profit assumptions, the 2026 dividend yield would be 4.3% or 8.6% under a 50% or 100% payout ratio scenario, respectively. Additionally, the company continues its share repurchase program in 2026, with a maximum buyback amount of US$40 million.

Limited new vessel supply is expected to benefit the supply-demand balance for smaller vessels. PACIFIC BASIN is continuously optimizing its fleet structure to build long-term competitive advantages. According to Clarksons, as of March 2026, the orderbook for Handymax and Handysize vessels stood at 11.7% and 8.5% of the existing fleet, respectively, while vessels aged over 20 years accounted for 13% and 14% of the fleet. New vessel deliveries are primarily intended to replace older tonnage. On the demand side, freight rates for smaller vessels are closely correlated with those for larger vessels. Potential catalysts in demand for larger vessels, such as the commencement of the Simandou project, could further improve the supply-demand dynamics for smaller vessels. In December 2025, PACIFIC BASIN announced the acquisition of four new-build Handysize vessels, scheduled for delivery in the first half of 2028, enhancing the long-term competitiveness of its fleet.

Risks include a slowdown in global economic growth, geopolitical changes, and a decline in market risk appetite.