Cosco Corp: DBSV upgraded Cosco Corp to HOLD, as operational challengesare reflected in the price. After losing c.40% in 3 months,Cosco is now among the cheapest shipyards in the region,trading at 0.6x P/BV. House believes sector headwinds and
operational challenges have been largely reflected in theprice.
Looking ahead, the shipping segment could return toprofits in 3Q15 taking cue from the surge in BDI from 600 points to 1100 points since June. Most importantly, DBSV believes Cosco will pull through this downturn with thestrong backing of its parent. DBSV has also lowered its TP to $0.42 (Prev: $0.49), pegged to a lower FY15 P/BVmultiple of 0.7x (Prev: 0.8x) in the light of deteriorating earnings.
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