Cathay Pacific Haitong: The performance of the 26Q2 tanker is high, and the boom will continue to be expected

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that demand was cut due to blockage in the Q2 Strait, and trade disruptions led to high oil freight rates. At present, the TCE of VLCC core routes still exceeds 100,000 US dollars/day, which is significantly higher than the average price center for the past 20 years and 2025. Due to tanker supply factors, the boom will continue for several years even without a geographical conflict. If sanctions against Iran are lifted, demand for oil transportation compliance will increase by 5%, and if the fleet size continues to be rigid in the next few years, the compliance market is expected to be extremely prosperous and sustainable for several years, opening up room for rising valuations.

Cathay Pacific Haitong's main views are as follows:

Oil industry: demand shrinks due to blockage in the Q2 Strait, and trade disturbances lead to high freight rates

At the end of February 2026, the US-Israel conflict broke out, and the strait continued to be blocked in March-May. It is estimated that crude oil shipping exports from the Middle East (including Yanbu Port) have been reduced by more than half, global crude oil shipments (tons) have been reduced by more than 10%; exports from the Gulf of America and South America have increased by more than 30%, hedging some of the effects, but there is still a gap in global oil transportation demand (tons nautical miles). At the beginning of the conflict, oil freight rates were high due to war risk premiums, rush shipping, and disruptions in regional supply and demand, etc., and set historical records. As the disorder gradually improved, freight rates have declined somewhat since May. It is estimated that during the Q2 performance period (corresponding to the March-May freight rate index), the average VLCCTCE for the US Gulf/West Africa/Middle East Yanbu-Asia route reached 12-140,000 US dollars/day, continuing to rise from the 110,000 US dollars/day in Q1. At present, the TCE of VLCC core routes still exceeds 100,000 US dollars/day, which is significantly higher than the average price center for the past 20 years and 2025.

COSCO Haineng: Q2 performance doubled year-on-year, and Q3 is expected to continue to rise

The Company Express estimates net profit for the first half of 2026 to be 4.5 billion yuan, an increase of 141% year on year; of these, Q2 net profit to mother was 2.3 billion yuan, double the previous year, and continued to increase 7% month on month. 1) Foreign trade oil transportation: Since the end of February, navigation through the Strait of Hormuz was blocked. Kpler data showed that 8 of the company's tankers were stranded in the bay, causing loss of operation in Q2. The company adjusted routes in a timely manner, actively grasped high-price opportunities, estimated that the turnover efficiency of the outer bay fleet was higher than that of the industry, and fully benefited from the high boom. As of late June, all of the stranded tankers had left safely. The operating efficiency of Q3's tanker fleet is expected to return to a high level, and profits are expected to continue to rise sequentially. 2) Domestic oil transportation: The profitability of domestic oil transportation is relatively stable, but high oil prices and reduced trade in Q2 put a slight pressure on the phased operation. As fuel costs fall and trade improves, the profitability of domestic oil transportation is also expected to improve sequentially in Q3.

China Merchants Shipping: Q2 performance surpassed expectations, and oil dispersion was both booming

The Company Express estimates net profit for the first half of 2026 to 66-7.3 billion yuan, an increase of 214%-248%; of these, Q2 net profit to mother was 38.45 billion yuan, an increase of more than three times the previous year, an increase of 40 to 60% over the previous year, exceeding market expectations. 1) Oil transportation: Trade was blocked and disrupted in the Q2 Strait. The company's fleet maintained high turnover, and flexible allocation and fleet advantages helped achieve high-price transactions. The Q2 tanker fleet's profit is expected to increase 50% month-on-month, and the estimated VLCCTCE is over 140,000 US dollars/day, which is higher than the industry. 2) Dry bulk: Supply and demand continued to improve in Q2, and the average BDI rose 87% year on year. Australian mine shipments were positive, and the impact of the Brazilian rainy season was weaker than in previous years. The average BCI rose 95% year on year. Oil prices soared and demand for coal in Asia was strong, and the average BPI rose 62% year over year. The Q2 bulk fleet's profit is expected to increase 170% month-on-month.

Outlook: Repeated geography will not change the strait recovery trend, and Iran's lifting of the ban will be extremely prosperous and sustainable

1) There have been two stages of entering the “super bull market” in 2022/25. The aging of oil tankers will accelerate in the next five years, and tight shipyard platforms will ensure that the “supply bottleneck” continues. Even without a geographical conflict, the boom will continue for several years. 2) Recent US actions may be aimed at forcing Iran to abandon its strait control claims. The bank believes that it will not change the straits to resume the medium-term trend. If the strait recovers, the oil transportation capacity utilization rate will return to a high level. Changjin's control and inventory replenishment will be further embellished, and high profits will be determined in 2026-27. 3) If sanctions against Iran are lifted, demand for oil transportation compliance will increase by 5%, and the fleet size will continue to be rigid in the next few years, and the compliance market is expected to be extremely prosperous and sustainable for several years, which will open up room for rising valuations. Dividends support the lower valuation limit, focus on non-pulse investment opportunities, and recommend COSCO Haineng/China Merchants Ships/China Marine Leasing.

Risk Alerts

The withdrawal of geographical, economic, and old capacity, and poor implementation of environmental protection measures as expected, etc.