Cosco

Cosco: Has secured 6 contracts valued at US$100m, for four emergency response / rescue / field support vessels (ERRVs) and two platform supply vessels (PSVs). The six vessels are scheduled for delivery by 1H16. The latest contracts bring Cosco’s year-to-date announced orders to ~US$217m (inclusive of US$60m option contracts exercised), taking the group’s orderbook to ~US$7.2-US$7.4b, with progressive deliveries up to 2015/16. We caution however that the group’s recent contracts could have been won at the expense of margins. In view of its poor execution, the stock is generally unloved by the street. Analysts generally prefer closest peer Yangzijiang, which has not only enjoyed strong order win momentum year-to-date (total orders secured year-to-date at US$815m), but also better profitability Cosco currently trades at 31.3x forward P/E versus Yangzijiang’s 8.6x. Overall, the street has 2 Hold and 9 Sell call ratings with a consensus TP of $0.61.