Cosco Corp: HSBC is not surprised on Cosco COrp's profit warning for 2Q15, but thinks the losses are due to problems in execution of backlog and poor order pricing.
The group has an order backlog of US$8.1b, more than 2x its 2014 revenues, and in normal circumstances it should be generating profits. But a combination of lack of experience and scale and poor pricing on offshore orders has led to losses.
HSBC has a Reduce rating and TP of $0.39 for the counter.
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