Yang Ming Marine Transport Corp (陽明海運) shares rose 33.91 percent last week, ending at their highest level in nine years on Friday, buoyed by better-than-expected profit last month.
The container shipper reported that net profit last month increased 739.48 percent year-on-year to NT$2.71 billion (US$95 million), which was almost as much as the NT$2.74 billion profit it made in the third quarter, Yang Ming said in a regulatory filing on Thursday.
Earnings per share were NT$0.92 last month, compared with NT$1.05 last quarter, while revenue reached NT$15.27 billion, up 29 percent from a year earlier, the company said.
Photo: Ann Wang, Reuters
Yang Ming shares rose 10 percent, the daily maximum, on Friday to close at NT$23.1, the highest since June 2011, Taiwan Stock Exchange data showed. So far this year, they have surged 220.4 percent.
Capital Investment Management Corp (群益投顧) on Friday retained its “buy” rating on the stock, with a target price of NT$25, as the container shipping sector’s supply-demand dynamics and order outlook are moving in positive directions, it said.
Yang Ming posted net losses of NT$818.36 million in the first quarter and NT$67.53 million in the second quarter, but the company turned profitable in the third quarter on the back of rising freight rates as demand for inventory replenishment bolstered freight volume, while shortfalls in labor and truck-trailer chassis due to the COVID-19 pandemic drive a container shortage.
Container shippers and sea transport companies are experiencing a once-in-a-century boom this year, driven by household product demand from the stay-at-home economy amid the pandemic and a shift to spending more on consumer products due to travel restrictions, analysts said.
While the container shortage has boosted freight rates on European routes, China’s removal of restrictions on freight rate hikes for US routes might cause rates to rise further in the short term to support shippers’ earnings, they said.
“Due to a surge in new infections, many governments have reimplemented lockdowns. Congestion at ports and higher demand for life necessities and healthcare supplies have caused shipping capacity to remain relatively tight,” Capital said in a research note.
“In addition, freight load factors of various routes have remained at 100 percent, which have in turn persistently boosted the freight rates of European routes to new highs,” it said.
In the year to date, freight rates on European routes have increased by 202.4 percent, while rates on US east and west coast routes have grown by 90.2 percent and 172 percent respectively, according to data compiled by Capital.
Yang Ming’s revenue this quarter should stay robust due to demand for inventory replenishment of household and consumer products, as well as the persistent container shortage, while fourth-quarter profit is estimated to increase to NT$6.66 billion, or earnings per share of NT$2.54, Capital said.
The company’s profit for this year would likely hit a 10-year high, as Capital forecast net profit of NT$8.51 billion, or earnings per share of NT$2.91.
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS