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    1919   CNE1000002J7

COSCO SHIPPING HOLDINGS CO., LTD.

(1919)
  Report
End-of-day quote. End-of-day quote Hong Kong Stock Exchange - 04/16
12.08 HKD   +5.41%
04/12Weekly market update : A tax revolution
04/07Correction to Cosco Shipping Article
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04/07China's Cosco Shipping Expects Profit Surge as Industry Flourishes
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China's Cosco Shipping Expects Profit Surge as Industry Flourishes

04/07/2021 | 04:38am EDT

By Joanne Chiu

A bullish profit forecast from China's largest container-shipping company sent its stock soaring and offered fresh evidence of how the industry is thriving thanks to robust global trade flows.

Freight rates have surged over the past year, with shipping groups reaping the benefits of earlier capacity cuts combined with stronger-than-expected demand. And while the recent Suez Canal blockage has created huge logistical headaches, it hasn't spoiled that positive picture. If anything, port backlogs and other snarls have provided further support to freight rates.

Late Tuesday, Cosco Shipping Holdings Co. said it expected this year's first-quarter net profit to total 15.41 billion yuan, or the equivalent of $2.3 billion. That compares with $44 million for the first three months of 2020.

Shipping rates rose nearly 54% compared with the fourth quarter, Cosco Shipping said, citing the widely tracked China Containerized Freight Index. The company controls the world's third-largest container carrier by capacity.

The company's Hong Kong shares jumped 29% on Wednesday to their highest since August 2008. Its Shanghai-traded stock rose by the daily trading limit of 10%.

Chen Shuai, deputy managing director at Cosco Shipping said at a briefing Wednesday that inventory levels at U.S. retailers remain low. The $1.9 trillion relief plan recently signed by President Biden will trigger restocking, boosting imports, he said.

Global trade has rebounded rapidly from the early stage of the pandemic, with China and other Asian manufacturing countries grabbing a bigger slice of exports including masks and bicycles--market share they are expected to keep after the public-health crisis fades.

That has helped buoy shares in container-shipping groups such as Denmark's A.P. Moeller-Maersk, South Korea's HMM Co., Taiwan's Evergreen Marine Corp. and Yang Ming Marine Transport Corp., and Cosco Shipping.

"It will be another strong year for the container-shipping industry after a robust 2020," said Maggie Wang, a transportation analyst at Bocom International, the investment banking arm of Bank of Communications Co.

Ms. Wang said that among other things, the industry had benefited from tight shipping supply and healthy demand for goods underpinned by huge government spending.

This year, she said, e-commerce would remain strong, as social distancing and travel restrictions dents demand for vacations, movies and dining out. Meanwhile, tight shipping capacity and issues such as container-box shortages and port congestion would continue to support freight rates, she said.

"It will take weeks to clear the backlogs left by hundreds of once-trapped container ships which are now moving through the Suez Canal to their destinations," she said.

The Evergreen-operated container ship that got stuck in the canal left hundreds of ships stranded and delayed sailing schedules for goods such as furniture, electronic appliances and automobile parts.

Much of what operators transport is typically covered by annual contracts. In a note to clients, Jefferies analyst Andrew Lee said Cosco Shipping had secured better-than-expected increases for its trans-Pacific annual contracts. The bank had expected these rates to rise 25%.

Write to Joanne Chiu at joanne.chiu@wsj.com

Corrections & Amplifications

This article was corrected at 1257 GMT because the original incorrectly said Cosco's Shanghai-traded stock halted trading after reaching this ceiling. The stock rose by the daily trading limit of 10%.

(END) Dow Jones Newswires

04-07-21 0638ET

Stocks mentioned in the article
ChangeLast1st jan.
A.P. MøLLER - MæRSK A/S 3.31% 15300 Delayed Quote.12.54%
COSCO SHIPPING HOLDINGS CO., LTD. 5.41% 12.08 End-of-day quote.29.89%
EVERGREEN MARINE CORPORATION (TAIWAN) LTD. 7.29% 63.3 End-of-day quote.55.53%
HMM CO.,LTD 4.36% 31150 End-of-day quote.123.30%
YANG MING MARINE TRANSPORT CORPORATION 8.35% 50.6 End-of-day quote.72.99%
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Financials
Sales 2021 208 B 31 909 M 31 909 M
Net income 2021 28 720 M 4 405 M 4 405 M
Net Debt 2021 40 426 M 6 200 M 6 200 M
P/E ratio 2021 4,12x
Yield 2021 1,21%
Capitalization 172 B 26 307 M 26 303 M
EV / Sales 2021 1,02x
EV / Sales 2022 0,98x
Nbr of Employees 29 379
Free-Float 55,5%
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Technical analysis trends COSCO SHIPPING HOLDINGS CO., LTD.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 11,60 CNY
Last Close Price 10,14 CNY
Spread / Highest target 66,2%
Spread / Average Target 14,4%
Spread / Lowest Target -49,8%
EPS Revisions
Managers and Directors
NameTitle
Zhi Jian Yang General Manager & Executive Director
Li Rong Xu Chairman
Yan Meng Member-Supervisory Board
Liang Yee Yang Independent Non-Executive Director
Jian Ping Zhang Member-Supervisory Board
Sector and Competitors