- RE-Iterate BUY Entry – 14.5 Target – 16.0 Stop Loss – 13.8
- COSCO SHIPPING Holdings Co., Ltd., formerly China COSCO Holdings Company Limited, is an investment holding company principally engaged in container shipping and related businesses. The Company is engaged in container shipping, dry bulk shipping, the management and operation of container terminals, container leasing and the provision of logistics services. The Company operates its business through two segments. The Container Shipping segment is engaged in the transportation of goods across the Pacific, Asia and Europe, and other international routes. The Terminal Operation and Investment segment is engaged in the operation and management of ports. The Company is also involved in the management and leasing of containers.
- Positive 1Q22 earnings alert. The company announced that it is expected a net profit attributable to the shareholders jumped by 78.6% YoY to RMB27.6bn. And EBIT is estimated to jump by 98% YoY to RMB39.3bn.
- Buoyant freight rates. The global shipping sector remains well profitable as container freight rates were firm at close to US$10,000 during 1Q22. The sanctions on Russia as well as China’s current lockdowns of cities disrupted the recovery of global supply chains. Accordingly, the respective freight rates of Europe-America and China-America routes continued to edge up in March. The incredibly high freight rates are not expected to fall substantially in the next few quarters. The US and Europe have decided to gradually rule out Russia in their trading system. China will maintain its zero-COVID policy till the 20th National Congress of the CCP in October/November. Global trade is being reset while the demand for goods is increasing as western countries are reopening.
- The updated market consensus of the EPS growth in FY22/23 is -8.2%/-55.8% YoY respectively, which translates to 2.4x/5.4x forward PE. The current PER is 2.2x. Bloomberg consensus average 12-month target price is HK$21.23.
Global Container Freight Index
