Cosco

Cosco: Weak set of results which was in-line. FY12 rev at $3.7b, -10%, while net profit at $105.7m, -24% & gross margins at 12.9% vs 9.1% yoy. Fall in turnover due to decrease in shipyard and dry bulk shipping rev. Turnover from shipyard operations -10.1% to $3.7b due to lower rev contribution from ship building segment which offset growth in rev from marine engineering segment.Turnover from dry bulk shipping and other businesses declined 19.6% to $53.7m in FY12 due to lower charter rates. Gross profit increased 27.3% to $484.9m in FY12 mainly due to higher profit contributions from shipyard operations. Other income -43.9% to $122.6m due to lower sale value of scrap materials and a one-off compensation received from customers in FY11. As at 31 Dec12, Grp’s order book stood at US$6.1b with progressive deliveries to 2015. New orders received in 2012 amounted to US$2.0b. Going forward, expect global economies to remain soft and competition to continue to heat up in 2013 as more players enter the O&M engineering segment. Aims to bolster marketing capabilities to better understand and meet customers’ needs and continue to enhance offerings. Separately, grp announced that it has secured a contract with energy drilling to construct a semi-sub worth over US$200m, with an option for 1 unit. When completed, the Rig will be one of the biggest and most modern semisubmersible tender assist drilling rigs in the mkt. Ratings as follow: Nomura maintains reduce with $0.62 TP Douche maintains Hold with $0.95 TP