Cosco Corporation (S) rated buy:
AmResearch in an Aug 4 research report says: "Cosco’s 1HFY09 net profit of $70.2 million was within expectations, accounting for 39% of FY09F’s earnings at $178 million and 40% of consensus estimates at $174 million. Annualised, Cosco’s 1HFY09 was 21% below our FY2009F earnings. Cosco registered a 67% y-o-y drop in net profit in tandem with a 19% contraction in revenue to $1.4 billion.
"The group’s 2QFY09 net profit rose 12% q-o-q to $37 million despite relatively flat revenue mainly due to reversal of trade receivable impairment. While Cosco’s weak execution progress in shipbuilding - due to the early stage of the learning curve for the group is a concern - we have been reassured by management’s view that the 11 vessels scheduled for delivery by November this year remains on track. Fair value of $1.50 per share - based on FY2010F’s PE of 17x - which implies a 15% discount to Cosco’s three-year average PE of 20x. MAINTAIN BUY."