CX Special Transportation Solutions Represent 25-33% of Total Freight Volume; Six New Freighters Acquired
Freight Volume Contribution: Cathay Pacific Air's special transportation solutions, including medical cold chain and live animal transport, accounted for 25-33% of its overall freight volume.
Growth in Live Animal Transport: The company's live animal cargo volume increased by 4.3% last year, largely due to demand from horse racing and collaborations with the Hong Kong Jockey Club.
New Aircraft Orders: Cathay Pacific Air has ordered six new-generation Airbus A350-F freighters, with deliveries set to begin in 2028.
Market Activity: The company's stock experienced a slight decline of 0.694%, with short selling activity reported at $3.67 million and a ratio of 6.410%.
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HSBC Research Raises Target Price for SWIRE PACIFIC A (00019.HK) to $98.2, Maintains Buy Rating
Business Outlook for SWIRE PACIFIC: The business outlook for SWIRE PACIFIC A is improving, driven by better earnings prospects for its subsidiaries, SWIREPROPERTIES and CATHAY PAC AIR, as noted in a report by HSBC Global Research.
Earnings Forecasts: HSBC Global Research has raised its earnings forecasts for SWIRE PACIFIC for 2025-2027 by 2.9% to 8.5%, while maintaining its dividend per share forecasts at $3.55, $3.7, and $3.8 for the respective years.
NAV and Target Price Adjustments: The broker increased its net asset value (NAV) forecast by 29.2% and raised the target price for SWIRE PACIFIC from $76 to $98.2, while keeping the target holding company discount at 36%.
Investment Rating: HSBC maintained a "Buy" rating for SWIRE PACIFIC, reflecting confidence in the company's growth and dividend payment policy amidst the anticipated expansion of its commercial portfolio.
<Research>HSBC Analysis of Ratings and Target Prices for H-shares in Shipping and Airline Sectors (Table)
Stock Performance Overview: COSCO SHIP HOLD and OOIL saw increases in their stock prices, while SITC, AIR CHINA, CATHAY PAC AIR, and CHINA SOUTH AIR experienced declines.
Short Selling Data: Significant short selling activity was noted across various stocks, with OOIL having the highest ratio at 24.107%, while COSCO SHIP HOLD had a ratio of 10.920%.
Analyst Ratings: Most companies listed received an "Underweight" rating, except for CATHAY PAC AIR, which was rated as a "Buy," and SITC, which was rated as "Hold."
Market Insights: Morgan Stanley maintains a positive outlook on oil tanker shipping but advises an underweight position on container shipping stocks.
HSBC Research Maintains 'Reduce' Rating on AIR CHINA and CHINA SOUTH AIR; Closure of Strait of Hormuz Causes Surge in Tanker Freight Rates
Impact on Oil and Gas Trade: Iran's closure of the Strait of Hormuz has tightened tanker fleet capacity and increased freight rates for long-haul transport, particularly affecting routes from the Americas and West Africa.
Container Shipping Sector Effects: Disruptions at Middle Eastern ports, which handle 5% of global container throughput, may lead to increased new ship orders despite worsened port congestion.
Airline Sector Profit Concerns: Escalating oil prices are expected to significantly reduce profits for Asian airlines, with a 10% increase in oil prices potentially decreasing profits for Chinese airlines by 68%.
Broker Ratings: HSBC Global Research has maintained a Reduce rating on several shipping and airline companies, including COSCO SHIP HOLD, AIR CHINA, and CHINA SOUTH AIR, amid these market challenges.
CX: All Flights to and from Dubai/Riyadh Canceled Until March 14
Flight Cancellations: Cathay Pacific has canceled all flights to and from Dubai and Riyadh from February 28 to March 14, 2026, due to the ongoing situation in the Middle East.
Ticket Waiver Policy: The airline has implemented a ticket waiver policy allowing customers traveling between Hong Kong and the affected cities to rebook, reroute, or refund their tickets without incurring usual fees.
<Research> JPM: Transformation of Asian Supply Chains; COSCO SHIP HOLD, OOIL, and CATHAY PAC AIR Preferred
Impact of Middle East Crisis: The ongoing Middle East crisis and Iran's closure of the Strait of Hormuz are significantly altering the Asian transportation and industrial landscape, driven by geopolitical shocks and changing trade dynamics, according to a JP Morgan report.
Opportunities for Key Industries: Companies in container shipping, tankers, bulk shipping, ports, supply chains, and defense are capitalizing on new opportunities due to their scale, flexibility, and strategic positioning, with the defense sector entering a structural upcycle.
Shift to Air Freight: As maritime bottlenecks increase, shippers are increasingly turning to air freight, benefiting airlines like Cathay Pacific and Singapore Airlines, which are well-positioned due to their fuel hedging strategies and established route networks.
Favorable Ratings for Shipping and Airlines: JP Morgan has favored companies like COSCO, OOIL, and Evergreen Marine in the container shipping sector for their global scale, while assigning an Overweight rating to Cathay Pacific and Singapore Airlines in the airline sector.
HSI Drops 570 Points, While Oil and Gold Miners Rise; Airlines and Banks Weigh Down
Market Performance: The HSI fell by 2.1% to close at 26,059, with significant declines in the HSCEI and HSTECH, while total market turnover reached $357.679 billion.
Oil and Gold Stocks Rise: Oil prices increased, boosting stocks like PETROCHINA and CNOOC by over 4%, while gold prices also rose, positively impacting companies such as SD GOLD and ZHAOJIN MINING.
Airlines and Financials Decline: Airlines faced losses due to disruptions in Middle East routes, with CHINA SOUTH AIR and CHINA EAST AIR dropping over 8%, while major financial institutions like HSBC and BOC HONG KONG also saw declines.
Chinese Developers and Insurers Struggle: Chinese developers like SUNAC and CHINA VANKE experienced significant drops, while insurers and brokers also faced losses, reflecting broader market concerns.
HSBC Research Raises Target Price for SWIRE PACIFIC A (00019.HK) to $98.2, Maintains Buy Rating
Business Outlook for SWIRE PACIFIC: The business outlook for SWIRE PACIFIC A is improving, driven by better earnings prospects for its subsidiaries, SWIREPROPERTIES and CATHAY PAC AIR, as noted in a report by HSBC Global Research.
Earnings Forecasts: HSBC Global Research has raised its earnings forecasts for SWIRE PACIFIC for 2025-2027 by 2.9% to 8.5%, while maintaining its dividend per share forecasts at $3.55, $3.7, and $3.8 for the respective years.
NAV and Target Price Adjustments: The broker increased its net asset value (NAV) forecast by 29.2% and raised the target price for SWIRE PACIFIC from $76 to $98.2, while keeping the target holding company discount at 36%.
Investment Rating: HSBC maintained a "Buy" rating for SWIRE PACIFIC, reflecting confidence in the company's growth and dividend payment policy amidst the anticipated expansion of its commercial portfolio.
<Research>HSBC Analysis of Ratings and Target Prices for H-shares in Shipping and Airline Sectors (Table)
Stock Performance Overview: COSCO SHIP HOLD and OOIL saw increases in their stock prices, while SITC, AIR CHINA, CATHAY PAC AIR, and CHINA SOUTH AIR experienced declines.
Short Selling Data: Significant short selling activity was noted across various stocks, with OOIL having the highest ratio at 24.107%, while COSCO SHIP HOLD had a ratio of 10.920%.
Analyst Ratings: Most companies listed received an "Underweight" rating, except for CATHAY PAC AIR, which was rated as a "Buy," and SITC, which was rated as "Hold."
Market Insights: Morgan Stanley maintains a positive outlook on oil tanker shipping but advises an underweight position on container shipping stocks.
HSBC Research Maintains 'Reduce' Rating on AIR CHINA and CHINA SOUTH AIR; Closure of Strait of Hormuz Causes Surge in Tanker Freight Rates
Impact on Oil and Gas Trade: Iran's closure of the Strait of Hormuz has tightened tanker fleet capacity and increased freight rates for long-haul transport, particularly affecting routes from the Americas and West Africa.
Container Shipping Sector Effects: Disruptions at Middle Eastern ports, which handle 5% of global container throughput, may lead to increased new ship orders despite worsened port congestion.
Airline Sector Profit Concerns: Escalating oil prices are expected to significantly reduce profits for Asian airlines, with a 10% increase in oil prices potentially decreasing profits for Chinese airlines by 68%.
Broker Ratings: HSBC Global Research has maintained a Reduce rating on several shipping and airline companies, including COSCO SHIP HOLD, AIR CHINA, and CHINA SOUTH AIR, amid these market challenges.
CX: All Flights to and from Dubai/Riyadh Canceled Until March 14
Flight Cancellations: Cathay Pacific has canceled all flights to and from Dubai and Riyadh from February 28 to March 14, 2026, due to the ongoing situation in the Middle East.
Ticket Waiver Policy: The airline has implemented a ticket waiver policy allowing customers traveling between Hong Kong and the affected cities to rebook, reroute, or refund their tickets without incurring usual fees.
<Research> JPM: Transformation of Asian Supply Chains; COSCO SHIP HOLD, OOIL, and CATHAY PAC AIR Preferred
Impact of Middle East Crisis: The ongoing Middle East crisis and Iran's closure of the Strait of Hormuz are significantly altering the Asian transportation and industrial landscape, driven by geopolitical shocks and changing trade dynamics, according to a JP Morgan report.
Opportunities for Key Industries: Companies in container shipping, tankers, bulk shipping, ports, supply chains, and defense are capitalizing on new opportunities due to their scale, flexibility, and strategic positioning, with the defense sector entering a structural upcycle.
Shift to Air Freight: As maritime bottlenecks increase, shippers are increasingly turning to air freight, benefiting airlines like Cathay Pacific and Singapore Airlines, which are well-positioned due to their fuel hedging strategies and established route networks.
Favorable Ratings for Shipping and Airlines: JP Morgan has favored companies like COSCO, OOIL, and Evergreen Marine in the container shipping sector for their global scale, while assigning an Overweight rating to Cathay Pacific and Singapore Airlines in the airline sector.
HSI Drops 570 Points, While Oil and Gold Miners Rise; Airlines and Banks Weigh Down
Market Performance: The HSI fell by 2.1% to close at 26,059, with significant declines in the HSCEI and HSTECH, while total market turnover reached $357.679 billion.
Oil and Gold Stocks Rise: Oil prices increased, boosting stocks like PETROCHINA and CNOOC by over 4%, while gold prices also rose, positively impacting companies such as SD GOLD and ZHAOJIN MINING.
Airlines and Financials Decline: Airlines faced losses due to disruptions in Middle East routes, with CHINA SOUTH AIR and CHINA EAST AIR dropping over 8%, while major financial institutions like HSBC and BOC HONG KONG also saw declines.
Chinese Developers and Insurers Struggle: Chinese developers like SUNAC and CHINA VANKE experienced significant drops, while insurers and brokers also faced losses, reflecting broader market concerns.
