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    How Investors Are Reacting To COSCO SHIPPING Energy (SEHK:1138) Major Connected-Party Fleet Expansion Plan

    Simply Wall St·12/15/2025 00:16:43
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    • COSCO SHIPPING Energy Transportation previously signed contracts with COSCO SHIPPING Heavy Industry subsidiaries to build one ethylene carrier and eighteen oil tankers, transactions that qualify as connected deals under Hong Kong Stock Exchange rules and therefore require shareholder approval.
    • The scale of these vessel orders signals a meaningful expansion of the company’s core energy-shipping fleet and underlines its intent to strengthen its role in global energy logistics.
    • We will now examine how this large-scale fleet expansion, and its classification as a connected transaction, influences COSCO SHIPPING Energy Transportation’s investment narrative.

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    What Is COSCO SHIPPING Energy Transportation's Investment Narrative?

    To own COSCO SHIPPING Energy Transportation, you need to believe that its scale, balance sheet and state-backed backing can keep converting volatile freight cycles into solid, reasonably high quality earnings, even as revenue growth moderates. The sharp year-to-date share price gain, alongside a pullback over the past month, suggests the market had already been pricing in strong recent performance and forecasts for faster profit growth than the wider Hong Kong market. Against that backdrop, the newly announced connected-vessel orders look material for the story: they tighten capital and governance links with the broader COSCO group and bring higher near term capex and execution risk, but also potentially extend the company’s earnings runway if utilisation and charter conditions cooperate. In the short term, funding, delivery schedules and governance scrutiny now sit alongside freight rates as the key catalysts to watch.

    However, larger related-party vessel deals introduce new governance and balance sheet risks investors should understand. COSCO SHIPPING Energy Transportation's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.

    Exploring Other Perspectives

    SEHK:1138 1-Year Stock Price Chart
    SEHK:1138 1-Year Stock Price Chart
    Three Simply Wall St Community fair value views for COSCO SHIPPING Energy Transportation span HK$7.86 to HK$11.44, underscoring how widely opinions differ. Set against this, the fresh connected-vessel orders and higher capex burden could be a key swing factor for how future returns actually play out.

    Explore 3 other fair value estimates on COSCO SHIPPING Energy Transportation - why the stock might be worth 17% less than the current price!

    Build Your Own COSCO SHIPPING Energy Transportation Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.