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Lawrence, hopefully! Keeping my fingers crossed for this counter. But i think few members are into this stock. Are you vested in this?
Lawrence, hopefully! Keeping my fingers crossed for this counter. But i think few members are into this stock. Are you vested in this?
Think the support at $2.09 to $2.10 should hold. If this is breached, then the next support levels are $2.05 to $2.06. Can any expert here confirm? Thanks!
CIMB-GK has raised its target price to $2.57 from $2.17 after its unit Cosco Shipyard Group (CSG) won conversion contracts together worth US$106 mln. CIMB-GK estimates the latest contract will bring CSG's order book to $785 mln, of which 80% may be recognized next year. "
"Cosco's contract win momentum is not spent yet. We anticipate this based on the massive capacity expansion coming through on its Zhoushan (China) yard (that will) increase group capacity by 30% by mid-2007," CIMB-GK said, adding Cosco may also secure an order for a full jack-up oil rig soon.
It said its 51%-owned unit COSCO Shipyard Group has secured conversion contracts worth uS$106 mln. They comprise a US$20 mln VLCC double hull conversion, a US$38 mln conversion of 6 RORO vessels, US$20 mln for two Suezmax-size tanker double hull conversions and a US$13 mln contract to repair a badly-damaged container vessel. The company will also do conversions of a container vessel for US$5 mln and two oil tankers for US$10 mln.
Cosco said the work will be carried out at its shipyards at Dalian, Nantong and Zhoushan in China.
"We expect to see more conversion projects in 2007 as ship owners comply with strict International Maritime Organization safety regulations," COSCO Corp president Ji Hai Sheng said in a statement. "These conversion projects will contribute significantly to the group's earnings," he said.
SembMar has sold 30 mln shares in Cosco at $2.00 each and said it will book an exceptional gain of $25.7 mln from the divestment. SembMar said it still holds 150.4 mln shares of Cosco, equivalent to a 6.8% stake, after the sale.
The shares in Cosco are held as a portfolio investment and not as part of SembMar's 30% strategic stake in Cosco Shipyard group.
Merrill Lynch are reinstating coverage on Cosco Corporation with a Buy recommendation and a 12-month price objective of S$2.34 based on DCF valuation. A strong macro outlook coupled with excellent execution will propel earnings growth.
Prospects for Chinese shipyards remain excellent. We expect further upside for Cosco as robust global economic growth and increasing trade activity has resulted in even stronger industry dynamics. The global merchant fleet is in the midst of rapid expansion. Nowhere is it more apparent than in China, where Cosco?s ship repair yards are all fully utilized at peak capacity.
Cosco?s strategy of focusing on its shipyard operations has borne fruit. Over the past two years, flawless execution has resulted in the group becoming one of the premier shipyards in China. A progressive expansion strategy already underway will help ensure that Cosco becomes the dominant shipyard operator In China.
Cosco seems on track to achieve record earnings over the next three years as it expands capacity and embarks on its offshore rig building program. We forecast a net profit CAGR of 28% over 2006-08, making Cosco one of the fastest growing blue-chips under our coverage.
A potential slowdown in the economic growth of China could dampen the demand for ship repair activities. Operational setbacks could delay or slow the group?s expansion plans. Shipping earnings are cyclical and a sharp decline in the price of oil could dent offshore demand for products and services.
Prospects for Chinese shipyards remain excellent. We expect further upside for Cosco as robust global economic growth and increasing trade activity has resulted in even stronger industry dynamics. The global merchant fleet is in the midst of rapid expansion. Nowhere is it more apparent than in China, where Cosco?s ship repair yards are all fully utilized at peak capacity.
Cosco?s strategy of focusing on its shipyard operations has borne fruit. Over the past two years, flawless execution has resulted in the group becoming one of the premier shipyards in China. A progressive expansion strategy already underway will help ensure that Cosco becomes the dominant shipyard operator In China.
Cosco seems on track to achieve record earnings over the next three years as it expands capacity and embarks on its offshore rig building program. We forecast a net profit CAGR of 28% over 2006-08, making Cosco one of the fastest growing blue-chips under our coverage.
A potential slowdown in the economic growth of China could dampen the demand for ship repair activities. Operational setbacks could delay or slow the group?s expansion plans. Shipping earnings are cyclical and a sharp decline in the price of oil could dent offshore demand for products and services.
CIMB-GK has raised its target price to $2.17 from $1.91 previously and is keeping its "outperform" rating on the stock on the back of its superior earnings upside, with an additional boost once full rig contracts are secured.
"The outlook for Cosco's current SRME (ship repair and marine engineering) portfolio is also positive enough to protect against any downside. This portfolio includes $620m worth of conversion jobs that will last into 2007," the brokerage said in a note.
"We see Cosco getting a full rig order sooner rather than later," it added, pointing to near-term expansion in Cosco's Dalian yard, where two slipways capable of launching jack-up rigs will be ready next month.
In view of higher traction from yard expansion and more expansion plans on the cards, CIMB-GK said it is raising its net profit forecasts for Cosco by 6% to $210m for 2006, 8% to $248.8m for 2007 and 20% to $301.1m for 2008.
UBS has lifted its target price to $2.16 from $1.89, saying the group's shipping operations performed better than expected in the third quarter.
UBS said it has expected Cosco's bulk shipping rates to fall about 15% yoy but rates have been flat compared to year-ago levels due to improved fleet quality.
To factor in better-than-expected charter rates for the shipping business, UBS said it lifted its 2006 net profit estimate for Cosco by 15% to $219m and for 2007 by 7% to $275m.
UBS said Cosco's shipyard operations will continue to be a key growth driver, with shipyard earnings likely rising 50% this year and 70% next year.
"Order book momentum is strong and we would not be surprised if Cosco announces a few more large contracts with potential for good margins shortly, " UBS said.
YTD, net profit of $160.1m has already matched FY05's full year earnings. Cosco saw strong contributions from its ship repair & marine engineering business and a one-off exceptional gain from the sale of the three bulk carriers amounting to some $19.5m. High-value contracts drove margin improvement 3Q06 turnover rose 35% Y/Y to $317.8m, driven by strong performances of its ship repair businesses. Ship repair sales jumped 45.9% to $276m, driven particularly by increases in the number of high-value contracts rather than pure ship repair, as well as through shipyard capacity upgrades.
Bulk shipping sales declined 10% to $37.1m due to softer freight charter rates in the quarter.
Rig-building FY07 growth will be driven by new facilities and significant capacity increases coming on-stream to Cosco Shipyard Group (CSG). It will also allow Cosco to further penetrate the niche markets of high-value offshore marine engineering work. CSG will be able to offer new rig-builds in the near future, with its workshop in Dalian operational by the end of the month. While no specific announcement has been made at this time, a rig contract may be imminent. CSG will have a significant competitive advantage if it is able to supply rigs to its customers faster than the current wait-time of 30-36 months that stalwart yards such as SembCorp Marine and Keppel are citing.
Cosco's PER of 15.7x looks attractive versus comparables such as SMM, which trades at 19.4x (and against KE's fair value multiple of 21x). Cosco's three-year EPS CAGR stands at 25.5x and PEG of 0.8x. KE has a target price of $2.15.
is there any more buying power left in this stock?
if the price moves to 2.15, the call warrant will also move up. $$
Question is will it move or do a dip first? Looks like it will do a dip first.
Cosco said in July that it expected to do better in 2006 as ship repair revenues would continue to grow thanks to increased capacity at its China shipyards.
According to the average of nine forecasts from analysts polled by Reuters Estimates, Cosco Corp.'s net profit is expected to rise by 21% this year.
The company said earlier this year it may eventually sell its bulk shipping business to focus entirely on repairing ships as well as building offshore oil rigs for Chinese oil firms -- a new business for the firm.
Investors have cheered the company's move into rig building and its share price has added three quarters to its value this year.
The stock trades at 21.3x forecast earnings, slightly cheaper than Labroy Marine's 22.8x, which has also recently taken an interest in rigs.
Cosco's rival STX Pan Ocean, a pure bulk shipping play, is valued at just 6.5x earnings
Company may release good result & news , target $2.15 base on broking house .
Cocos will break $2, you must keep this counter.
Hi, this is first posting here. Realise that there are a lot of experts here and i'm quite embarassed by my limited knowledge. Will read up more on TA so that i can contribute to the forums!
Have a qns on Cosco that needs advise. I have 18 lots at an avg price of $1.34. Was hoping to sell at $1.85 but it didn't hit the target. But there was a report by Kim Eng with a price tgt of $2.15 ... should i sell or hold?