Middle East conflict: Which shipping stocks are in focus?

Among them is PVT – PetroVietnam Transportation Corporation, whose stock has been consolidating near its bottom range. With oil prices trending upward in response to geopolitical risks, can PVT gain momentum?

Fleet Expansion and Market Position

Since early 2024, PVT has added six new vessels of various types and tonnages, including product tankers, chemical carriers, LPG vessels, and bulk carriers. This fleet expansion enhances its ability to meet diverse transport demands across segments.

Following a capital raise and dividend distribution, PVT shares have been consolidating around VND 18,000/share. Analysts note that the outbreak of war between Israel and Iran has raised fears about the potential closure of the Strait of Hormuz — a critical chokepoint for global crude oil and liquefied natural gas (LNG) transport. A closure could send oil prices surging.

The Strait of Hormuz, connecting the Persian Gulf and the Indian Ocean, lies between Iran to the north and the UAE and Oman to the south. It stretches nearly 100 miles (161 km) and narrows to about 21 miles (33 km) at its tightest point.

This maritime corridor handles roughly one-third of global seaborne crude oil and about one-fifth of global LNG shipments. Notably, 80% of this volume is destined for Asian markets, primarily China, India, and Japan, while 20% is shipped to Europe.

According to Bloomberg, although there are alternative pipeline routes, their capacity is limited. The International Energy Agency (IEA) estimates that land-based transport capacity for crude oil is only one-fourth that of maritime routes. Therefore, any disruption to the Strait of Hormuz could spark a surge in oil and shipping-related stocks. Besides peers like VOS and HAH, PVT is considered a key ticker to watch amid ongoing conflict in the region.

Q1/2025 Financial Performance

In Q1/2025, PVT recorded nearly VND 2,790 billion in net revenue, up 10% year-on-year. However, rising cost of goods sold led to a 6.2% drop in gross profit to VND 493 billion. Net profit after tax stood at VND 277 billion, down 9.5% compared to Q1/2024, fulfilling 28.8% of the annual target.

As of March 31, 2025, PVT’s total assets stood at VND 19,551 billion, down 1.5% from the beginning of the year. Cash and cash equivalents totalled over VND 4,600 billion, up more than VND 100 billion. Short-term receivables rose slightly to VND 1,423 billion, while inventories declined to VND 309 billion.

On the liabilities side, PVT reported total debt of VND 8,885 billion, a 6.1% decrease. Short-term borrowings stood at VND 1,480 billion, and long-term borrowings decreased to VND 5,012 billion.

Investment Strategy and 2025 Outlook

At the recent Annual General Meeting, PVT announced a capital expenditure plan of VND 3,551 billion (approx. USD 141 million) for 2025, primarily for fleet expansion.

Key investment plans from 2024 to 2025 include:

- 1 product tanker (MR) or 1 bulk carrier (USD 29 million),

- 2 MR tankers or 1 Aframax crude oil tanker (USD 52 million),

- 1 LPG/VLGC vessel or 1–3 oil tankers (USD 60 million),
financed by VND 1,261 billion in equity and VND 2,290 billion in loans.

For 2025, PVT targets consolidated revenue of VND 10,300 billion and net profit of VND 960 billion, both slightly down from 2024 actuals. The conservative forecast reflects a decline in freight rates across segments, particularly bulk carriers, while crude oil, gas, and chemical tanker rates have softened moderately.

To navigate rate volatility, PVT has adopted flexible depreciation strategies aligned with market cycles and has made provisions for vessel maintenance. The company is also expanding into logistics via M&A, aiming to acquire existing logistics firms. Negotiations with strategic shareholders and external partners are ongoing.

Historically, PVT has consistently exceeded its earnings targets, with an average annual revenue growth of 37.9% and profit growth of 121% over the past five years. Based on current shipping market trends and 2025 plans, An Binh Securities forecasts VND 1,050 billion in net profit for 2025. The stock is expected to trade between VND 19,970 and 24,000/share.

Investors are advised to closely monitor oil price trends and Middle East developments when considering PVT or other marine transport stocks, as the sector could see renewed momentum amid geopolitical tensions.