Cosco: Could see short-term positive sentiment after it announced that it has secured a US$220m contract to build 2 self-propelled construction vessels. Contract is awarded by an Asian Co. to Cosco (Nantong) Shipyard. The vessels are scheduled for delivery in 4Q 13 and 1Q14 respectively.
Kim Eng note that while the contract is certainly welcome news in the current soft offshore market, margins are likely to remain depressed due to learning curve issues on its earlier contracts. Bulk shipping newbuilds are still also dogged by execution issues and low pricing. Overall house maintain Sell recommendation with $0.72 TP.
Similarly CIMB maintains Sell with TP $0.92.
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