Vietnam shipping, seaport stocks skyrocket

Tickers of Vietnamese shipping and seaport firms have surged 17-32% over the past month, driving a 6.4% gain on Vietnam’s benchmark VN-Index thanks to a brighter outlook for trade and freight and charter rates unlikely to fall further.

VOS of Vietnam Ocean Shipping JSC saw the strongest increase of 32% from VND8,500 to VND11,150 ($0.46) per share in one month. HAH of Hai An Transport & Stevedoring JSC also rose from VND28,000 to VND35,950 ($1.48) per share, up 29%.

Stocks in leading companies in the shipping and seaport industry such as Gemadept (GMD), PV Trans (PVT), and Viconship (VSC) recorded a price hike of 16.6% or more.

Positive developments for shipping and seaport stocks came from the gradual recovery of trade. According to the General Statistics Office (GSO), the export and import turnover of goods in November was estimated at $60.88 billion, up 5.9% year-on-year compared to the 11.6% recorded in the first half of the year.

The figure in the 11 months hit $619.17 billion, down 8.3% year-on-year. Vietnam's import-export turnover has recovered since August, reaching $60 billion per month for four consecutive months.

According to the Vietnam Maritime Administration (VMA), the volume of goods through seaports in the first 10 months was estimated at 624.5 million tons, up 3% over the same period last year.

After many months of decline, some localities have seen an increase in cargo throughput via seaports such as Ho Chi Minh City, Quang Ninh and Hai Phong. The volume of container cargo through seaports in September and October decreased by 3% year-on-year, much lower than in previous months.

Although the maritime transport sector still faces many difficulties, it is gradually improving, with more positive signals towards the year-end, the VMA said.

Broker Yuanta Vietnam Securities said that freight and ship charter rates have decreased to levels before Covid-19, so they are unlikely to fall further. The World Container Index, representing container freight rates, has plummeted more than 80% from its peak in September 2021. The Baltic Dry Index, a shipping freight-cost index issued daily by the London-based Baltic Exchange, has recovered since September and is at its highest level since the beginning of the year, despite still being three times lower than its peak in early October 2021.

Meanwhile, demand for cargo shipping is starting to revive as the global economy recovers and inflation cools down while ship supply remains unchanged. Therefore, Yuanta Vietnam Securities forecasts that freight and charter rates will recover from the end of 2023 and in 2024.

Another good sign for shipping and seaport stocks is a draft proposal to increase the prices of container stevedoring services from January 1, 2024. Accordingly, prices will expand by 10% at most ports.

Business results among transportation and seaport enterprises bottomed out in the second quarter but recovered from the third quarter. Most leading enterprises in the industry reported Q3 revenue reaching the highest level since the beginning of the year, but profits were mixed.

The Vietnam Container Shipping (Viconship) recorded Q3 revenue and net profit of VND557 billion ($22.94 million) and VND32.5 billion ($1.34 million), respectively. The company's profit was eroded by interest expenses which hit VND57.4 billion ($2.36 million) in Q3 and VND126 billion ($5.2 million) in the first nine months due to a sharp increase in loans to finance the purchase of Nam Hai Dinh Vu port and real estate investments.

HAH posted Q3 revenue of VND681 billion ($28 million), the highest level in three quarters, and net profit of VND106 billion ($4.37 million), up 10% compared to Q2.

Meanwhile, Gemadept’s revenue reached nearly VND1 trillion ($41.19 million), the highest since the beginning of the year, and its net profit was VND254 billion ($10.46 million), lower than Q2 due to unusual profits from its divestment from Nam Hai Dinh Vu port.

Vietnam Maritime Corporation, listed on the Ho Chi Minh Stock Exchange (HoSE) as MVN, recorded VND3,231 billion ($133.07 million) in Q3 net revenue, equivalent to Q2 and higher than Q1. Its net profit was VND268 billion ($11.04 million), down 27% compared to Q2 but higher than Q1