Goldman Sachs: China port throughput expected to rebound in the fourth quarter; port charges may rise in 2027

When is throughput expected to return to growth?

Goldman Sachs expects export resilience to support year-over-year growth of about 5% in China's port throughput in the fourth quarter of 2026, faster than the approximately 1% growth rate in the third quarter; the third quarter was disrupted by severe weather.
Despite expecting a rebound in the fourth quarter, Goldman Sachs lowered its forecast for full-year throughput growth in 2026 from 4.7% to 4.3%; it expects growth of 3.7% in 2027 and 3.5% in 2028.

Goldman Sachs believes that congestion at ports during the peak season could strengthen ports' bargaining power relative to shipping companies. The ceiling on listed port charges in China has not been raised for five years, and some ports, including Qingdao Port, have already raised their listed rates.
During the previous cycle of increases in posted rates, average port charges in China rose by close to 10% year over year. However, COSCO SHIPPING Ports' management said congestion at domestic terminals had eased around the National Day holiday, and the congestion index had declined further over the most recent one to two weeks.
Based on adjustments to its throughput and port-charge assumptions, Goldman Sachs raised its net profit forecasts for the port companies it covers for the period from 2026 through 2028 by 1% to 10%.

The company's revenue in the third quarter of 2026 grew 13% year over year, supported by throughput growth of about 8% and mid-single-digit growth in average charges. Gross profit grew 19%, and the gross margin increased by 1.4 percentage points. However, net profit was US$82.6 million, unchanged year over year and in line with Goldman Sachs' expectations.
The main offsetting factor was that the effective tax rate rose from about 16% in the same period a year earlier to about 32%, because the company expected dividend distributions from some overseas terminals and increased its provision for withholding tax. Management expects the rate to return to normal in the fourth quarter.
Year-over-year growth in average charges at domestic subsidiaries accelerated from 3.2% in the first half to an estimated rate of about 9% in the third quarter. Management attributed this to an improved business mix resulting from higher foreign-trade cargo volumes. Profit at overseas terminals in the third quarter more than doubled year over year to approximately US$27 million, supported by the ramp-up of new capacity at the Suez Canal Container Terminal, improved profitability in Europe, and narrower losses at some newly operating terminals.

Shanghai International Port Group's net profit in the third quarter was RMB 4.6 billion, up 20% year over year and in the mid-single digits above Goldman Sachs' expectations, mainly thanks to stronger-than-expected investment income. Income from associates and joint ventures grew 35% year over year.
At the same time, the company's throughput fell 3% year over year, operating costs rose 18%, and earnings before interest and taxes declined 9%. Goldman Sachs attributed the weaker operating profit to multiple typhoons disrupting operations in Shanghai during the summer, as well as the need to accelerate container clearance after the typhoons.
Among the companies it covers, Goldman Sachs prefers COSCO SHIPPING Ports. It is positive on potential price increases at its domestic terminals, higher utilization and narrowing losses at the Port of Chancay in Peru, and improved profitability at the Port of Piraeus after shipping companies return to the Suez Canal. The firm maintained its Buy rating and raised its 12-month target price from HK$6.9 to HK$7.6.