COSCO SHIP HOLD (01919.HK) shares plummeted 5.08% in intraday trading, as investors reacted to the company's recently released interim results that fell short of analyst expectations. The container shipping giant's stock decline comes amid growing concerns about the industry's profitability in the face of weakening global demand and ongoing trade tensions.

According to the company's earnings report, COSCO SHIP HOLD posted a profit attributable to equity holders of 17.5 billion yuan for the first half of 2025, representing a modest 3.9% increase from the previous year. However, a closer look at the second quarter performance reveals a more concerning trend. Q2 net profit attributable to the parent company plunged 42.25% year-over-year to 5.842 billion yuan, while revenue for the quarter declined 3.41% to 51.139 billion yuan. The company reported earnings per share of 1.12 yuan, falling short of the 1.33 yuan estimated by analysts at Visible Alpha. Similarly, the total revenue of 109.1 billion yuan for the first half missed the analysts' projection of 111.3 billion yuan.

Industry analysts have pointed out several challenges facing container shipping companies, including weakening cargo volumes, declining freight rates on US and European routes, and substantial capacity deliveries expected within the year. The ongoing use of the Cape Route for European services by most shipping companies is also putting pressure on profitability. Despite these headwinds, COSCO SHIP HOLD declared an interim dividend of 0.56 yuan per share, which may provide some consolation to shareholders. However, with the container shipping sector's profitability expected to remain under pressure throughout the year, investors will be closely monitoring whether COSCO SHIP HOLD can maintain its industry-outperforming profitability and capitalize on potential alpha opportunities in this challenging environment.