What causes the HAH stock price to soar?

HAH stock price rose to its highest level in six months on June 10 after reports that shipping rates remain strong and that the business is completing the rights to issue a 15% dividend.

According to ACBS Securities' analysis on HAH stock, HAH's income is expected to increase by 27.3% to 3,326 billion VND in 2024, with a net profit of 290 billion VND for parent company shareholders. The estimated container throughput for the port section is 460,000 TEU (an increase of 7.7%). Following the opening of new shipping lines, vessel operation is 565,000 TEU (up 29.1%), while depot operation is 238,000 TEU (up 12.8%).

In terms of profit distribution for 2023, HAH's Board of Directors approved a 15% stock dividend, 30% of net profit after tax for the development investment fund, and 3% for the Board of Directors fund. In 2024, HAH intends to give 10% cash and 10% equity dividends.

Aside from increased shipping rates, dividend distribution is another factor for the increase in HAH stock price during the trading session on June 10, 2024.

Previously, according to the Q1/2024 financial report, HAH's revenue was 704 billion VND (up 7.5%). The gross profit was 106 billion VND, mostly influenced by vessel operating, which had a gross margin of just 5.5% owing to lower sea freight rates and ship lease prices.

HAH presently has 13 boats with a combined capacity of 19,780 TEU, including the newest vessel, HAIAN BETA, which arrived at the end of April 2024. According to the vessel delivery schedule, HAH will get two further new boats with serial numbers HCY-267 (HAIAN SKY) and HCY-268 in late June and the end of 2024, respectively. These are the last two vessels to be delivered out of a total of four vessels with a capacity of 1,800 TEU each, which were ordered for construction in 2021 with a total investment of 2,000 billion VND.

Regarding joint ventures and logistics, HAH continues to collaborate with Ocean Network Express (ONE) on Vietnam-Singapore transport routes and is implementing a port and depot project in Cai Mep with a 300 billion VND investment to expand this segment, which accounts for approximately 15-20% of total annual revenue.

This year, this company hopes to get three additional freshly constructed vessels. The company intends to increase its market share in container transport and expand its domestic route operations by increasing the number of trips and new port calls, as well as developing intra-Asian routes (Southeast Asia, Northeast Asia, and the Middle East), effectively managing its fleet by flexibly applying the ratio of self-operated and leased vessels, and lowering costs.

SSI Securities expects HAH's operational output recovery to exceed forecasts. In April, import-export throughput at the Hai Phong port hub climbed by nearly 20%, while Hai An Port increased by 45%, showing a favorable trend in April and the second quarter overall. Although it is still too early to establish global economic trends, SSI believes demand will rebound smoothly in the coming quarters of this year. The expansion in products reserves by China and Western nations may improve intra-Asian transport demand, with the volume expected to climb by double digits in 2024-25.

Meanwhile, worldwide container shipping rates remain constant, both on the spot market and for fixed-term ship leasing. Notably, the global container index, which represents spot freight prices for major international shipping routes, has returned to Covid-era levels, with the fixed-term lease rate for a 1,700 TEU vessel growing by 65% since the beginning of the year, reaching USD 15,800 per day. SSI thinks that despite continuous volatility, China's demand rebound, as well as interruptions in the Red Sea, are important drivers of this development.

The extended high freight prices will also have a beneficial influence on the expiring contracts for fixed-term ship rentals beginning in Q4 2024. Spot prices are projected to rise by 5%, rather than 3% as previously estimated, due to a favorable container transit market. For 2025, SSI's forecasts based on current variables affecting freight rates are projected to hold. Although container shipping rates may not rise in 2025, the yearly contribution from three new boats, along with maintained high freight rates, leads SSI to anticipate a significant improvement in HAH's total profit margin. Investors continue to hold HAH shares in anticipation of the company's future growth.