COSCO Shipping Energy Transportation (H/A): Earnings and dividend surprises beyond the crude tanker rate spike

Crude tanker rates have surged to record levels given ramping Hormuz exports via ship-to-ship transfer. Record crude tanker rates will inevitably normalize at some point, but we see the debate shifting to earnings and dividend yields where we see further surprises. BofAe is 20% above consensus for 2026-27 EPS, while we see CSET paying 8-9% 2026-27 dividend yields. We reiterate our Buy rating with catalysts from big 4Q26 earnings (we are at RMB6.2bn net income at +75% QoQ) and attractive dividend. CSET 3Q26 net income is seen up to RMB3.6bn (+50% QoQ) helped by recovering international tanker volumes (-10% YoY vs 1H at +23% YoY) and strengthening international tanker rates (+20% QoQ). We note the recent spot rate surge is expected to support 4Q26 net income at RMB6.3bn (+75% QoQ) with 4Q26 rates seen at +40% QoQ to capture the recent rate spike. We see CSET EPS at HK$3.03 in 2026 and HK$3.67 in 2027 tracking 20% above consensus estimates. We see overall 2027 EPS strengthening YoY suppor