Pan Ocean expects good performance due to BDI rise ... Raised investment opinion (SK Securities)

SK Securities expects Pan Ocean to show positive performance in the third quarter as the Dry Goods Shipping Freight Index (BDI) rose.

As a result, the investment opinion was raised from 'hold' to 'buy' and the target price was maintained at 7,400 won.

SK Securities expects Pan Ocean to generate sales of 1.2191 trillion won and operating profit of 143.8 billion won in the third quarter.

As BDI has risen from an average of 2,793 pts in the second quarter to 3,732 pts in the third quarter, it is encouraging that it can once again record a quarterly operating profit of more than 100 billion won following the second quarter.

As a result, annual sales are expected to reach 4.383 trillion won and operating profit of 413.7 billion won in 2021.

However, as China is on the verge of cutting steel production ahead of the Beijing Winter Olympics, it is expected to serve as a negative factor for demand for bulk carriers.

SK Securities said, "As the overall demand for bulk carriers is decreasing, supply is increasing, so it is unlikely that the BDI strength that has continued until recently will continue.".

Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com