3 days ago
HMM cancels W2tr in shares to lift stock value
Korea's largest container shipping company HMM announced plans to buy 2.14 trillion won ($1.54 billion) worth of its own shares by September as part of its efforts to enhance stakeholder value.
According to the company's regulatory filing on Thursday, it will acquire 81 million shares by Sept. 12, representing 7.9 percent of its total shares listed on Korea's benchmark Kospi. The purchased shares will be canceled.
'The share cancellation will be carried out using distributable profits, and there will be no reduction in capital stock,' the company stated. As a result of continued strong sales over the years, HMM now has 13.5 trillion won in distributable profits.
The cancellation, part of a 2.5 trillion-won shareholder value enhancement plan announced in January, is HMM's first since the company came under the control of state-run entities following a liquidity crisis in 2016.
The Korea Development Bank and the Korea Ocean Business Corporation currently hold 36 percent and 35.7 percent of the company's shares, respectively.
Securities firms see HMM's share buyback as a strong potential driver for the company's stock price, which has recently been weighed down by a bleak outlook for the shipping industry.
'US 'reciprocal' tax measures are likely to reduce container shipping volumes. At the same time, the global order backlog for new ships is equivalent to 31 percent of the current operating fleet, and low scrapping rates mean this excess capacity could lead to oversupply in shipping services,' said Choi Ji-yun, a researcher at Yuanta Securities.
'However, HMM's large-scale shareholder return is expected to help support its stock price, even amid the downturn in container shipping conditions.'
The company has already felt the impact of declining freight rates caused by US levies, with operating profit dropping 62 percent year-on-year to 23.32 billion won in the second quarter.
The Shanghai Containerized Freight Index, a key benchmark for container shipping rates, averaged 1,701 points in the first half of 2025, down 27 percent year-on-year.
HMM's second-quarter sales declined only slightly, down 1.5 percent year-on-year, standing at 2.62 trillion won.
