CIMB downgrades STX Pan Ocean (GZ9.SG) to Underperform from Neutral, says 3Q below expectations with annualised 9-month core net profit 24% below FY forecast, due to weaker-than-expected operating profit from bulk shipping, larger-than-expected operating loss from tanker shipping, unexpectedly high taxes. 

“STXPO also underperformed its own 2H guidance made three months earlier.” Gross profit margin from chartered-in fleet at only 0.7% in 3Q vs guidance of 2%-5% for 2H, says it’s “extremely unlikely” STXPO will meet target, as spot handysize rates continue to decline. 

 

House keeps forecasts, S$13.90 target price (based on 10% discount to SOTP) pending analysts call, “but we are likely to lower estimates.” Says potential de-rating catalysts are weaker bulk, tanker shipping prospects next year. 

 

Shares off 5.2% at $14.72 midday.