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Investing.com - UBS initiated coverage on China Merchants Energy Shipping Co Ltd (SS:601872) with a Buy rating and a price target of RMB8.10.
The investment bank cited multiple market supply constraints as a key factor supporting its positive outlook, including limited orders, sanctions, decarbonization efforts, and ship age considerations.
UBS expects steady earnings and dividends for China Merchants Energy Shipping during 2025-2027, with limited downside risks due to structural demand growth factors such as tonne-mile expansion and increasing demand in emerging markets.
The firm highlighted CMES’s competitive advantages, which include lower risk through diversification, low-cost operations, market share gains, and high dividend payments.
UBS also noted potential upside for the company as increasing European Union and United States sanctions on shadow fleets could lead to their gradual exit from the market, creating additional opportunities for China Merchants Energy Shipping.
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