Operating Profit Forecast Jumps 41%... Shipping Sector Emerges as a Defensive Stock [Weekend Money]

With container freight rates surging and the bulk shipping market showing stronger-than-expected performance, analysts suggest that the shipping industry should be considered a defensive sector to counter recent stock market volatility.

An HMM container ship is docked at Busan Port. Photo by Jin-Hyung Kang aymsdream@

According to Korea Investment & Securities, the Shanghai Containerized Freight Index (SCFI) has risen by 74% over the past two months. The China Containerized Freight Index (CCFI), which more closely reflects the actual performance of shipping companies, also saw its second-quarter average reach 1,350 points, up 16% year-on-year, surpassing the increase from fuel surcharges. Last week, the CCFI surpassed 1,800 points for the first time since September 2024. Researcher Choi Gyowoon at Korea Investment & Securities explained, "As of July, aside from the reduction in fuel surcharges, there are no visible factors for a decline in freight rates. Above all, container demand is increasing beyond expectations." He continued, "At the beginning of the year, UK shipbuilding and shipping analysis firm Clarksons expected container ton-mile demand to contract this year, but has since raised its forecasts every month and now projects a 3% improvement." He added, "Shippers are compelled to expedite shipments, given stronger-than-expected downstream consumption, supply chain instability caused by the Middle East conflict, and uncertainty over U.S. tariffs. As a result, shipping companies are considered to have gained the upper hand in freight rate negotiations."

Korea Investment & Securities raised its 2026 operating profit forecast for HMM to 1.6 trillion won, a 41% increase from its previous estimate. Researcher Choi said, "Maersk has significantly raised its earnings guidance for this year. Previously, the worst-case scenario even included an operating loss, but now there is hope for profit growth compared to the previous year." He added, "Following this, the earnings consensus (the average of broker forecasts) for global container shipping companies is also being revised upward, but among them, HMM's increase has been the smallest."

The bulk shipping market is also exceeding expectations. The average Baltic Dry Index (BDI) for the second quarter marked a four-year high, and after a brief pause in June, rebounded by 15% in July. Choi said, "As a result, Pan Ocean is not only seeing growth in tankers and LNG but also strong profits in dry bulk shipping. This year, the earnings consensus for the transport sector has been steadily revised upward, and operating profit for the second quarter is expected to be even higher. Nevertheless, due to indiscriminate share price adjustments, the price-to-book ratio (PBR) for 2026 stands at only 0.4 times." He continued, "We recommend paying attention to the shipping sector as an alternative to hedge against recent market volatility and geopolitical uncertainty."

This content was produced with the assistance of AI translation services.