BofA Securities: Container Shipping Has Not Yet Passed the Worst Phase, Maintains "Underperform" Ratings for COSCO SHIP HOLD (01919) and OOIL (00316)

BofA Securities released a research report stating that the container shipping industry has not yet passed through its most challenging period, with excess supply and the potential pressure from the reopening of Red Sea routes likely to lead to EBIT losses in 2026. The firm anticipates that the first half of 2026 will be negatively impacted by a significant increase in vessel supply, while the second half faces growing pressure from the increasingly probable prospect of Red Sea route resumption. It believes that these losses will compel container shipping companies to scale back shareholder returns in 2026 to preserve cash during the downturn. The firm maintains an "Underperform" rating for COSCO SHIP HOLD (01919), OOIL (00316), and Evergreen Marine (2603.TW). It maintains a "Neutral" rating for Japanese shipping companies, as their current valuations remain above historical lows. Close attention should be paid to any negative developments regarding the restoration of Red Sea routes, as well as the risk of further declines in spot freight rates as port congestion eases and seasonal factors weaken.