Cosco announced that it has signed 11 contracts and 4 letters of intent worth about US$440m with 4 European shipowners to build 11 units of 57,000 dwt bulk carriers and 4 units of 82,000 dwt bulk carriers. Deliveries of the vessels are expected to take place from end-2011 to mid-2013. Together with the US$78m order wins in Apr for two 57,000dwt vessels, YTD total wins amount to US$518m.
Note that these contracts will take time before they become effective, and is dependent primarily on receiving initial deposits from the customers. So far, we understand Cosco has only received deposits for two of the vessels. Moreover, the latest contract value also indicates much lower pricing (and margin) compared to its previous order wins. HOLD rating with TP of $1.44.
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