Cosco Corp

Cosco Corp: Group secured a contract for an LNG vessel worth Rmb500m from a Chinese ship owner, scheduled for delivery in 1Q15. No further details were given. Highlighted a rpt out by CS yesterday noting that Chinese banks are increasing its role as a ship financier, with easily available credit potentially fuelling a renewed order spree at Chinese yards. This should continue to support the valuations of Cosco Corp and Yangzijiang. Comparatively, Cosco Corp trades at 23.3x forward P/E (5-yr avg of 16.7x); Yangzijiang trades at 6.1x forward P/E (5-yr avg of 7.9x). Cosco Corp has consensus TP of $0.72 (implied 11.1% downside); Yangzijiang has consensus TP of $1.01 (implied 13.5% upside).