Cosco Singapore Higher on New Shipbuilding Orders
Shares of Cosco Corp. Singapore, a shipping company that owns a shipyard in China, rebounded after announcing it secured an order to build 29 bulk carriers worth $1.34b.
The news has provided the stock a much needed shot in the arm as investors have been selling the stock in the last two days on concerns its shareholder, shipyard operator SembCorp Marine Ltd., may sell more shares in the company. SembCorp Marine said it had sold 39 million Cosco shares, taking its holding to 111.4 million shares.
The latest orders put Cosco's current order book at $6.4b, $6.2b of which were secured this year, according to Kim Eng Securities.
The brokerage believes Cosco could secure another $900m in orders based on existing options with customers.
Following the new orders, DBS said it has raised its 2008 net profit forecast by 10 percent to $499.8m and its 2009 net profit forecast by 10 percent to $725.1m. For 2007, DBS expects Cosco to achieve a net profit of $296.2m, compared with $205.5m in 2006.
[Source: Thomson Financial]