J.P. Morgan lifted its target price for Pacific Basin Shipping (02343) to HK$2.5 from HK$1.7 and maintained its "overweight" rating.
The research house said Pacific Basin staged a notable recovery in 2H 2020, returning to the profitable territory following COVID-19 disruptions (US$14mn versus US$222mn loss in 1H).
With a very strong opening year-to-date, spot freight rates, including Baltic Handysize Index and Baltic Supramax Index, have rallied to 10-year high levels; JPM expects industry demand-supply fundamentals to remain favourable in 2021 with bulk demand poised for a visible rebound (+4% forecasted by industry consultant Clarkson) against tight supply in light of historical order book-to-vessel ratio and low scheduled vessel delivery.
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