标题: [20081112]Shipping stocks today rose against the overall market, which is dri [打印本页] 作者: wandy 时间: 2008-11-12 16:34 标题: [20081112]Shipping stocks today rose against the overall market, which is dri
Shipping stocks today rose against the overall market, which is driven by the following two factors, in our opinion:
1. The downtrend in BDI has been much milder and we believe a moderate recovery could be expected on the ground that we have noted previously. The market may have such expectation too;
2. COSCO said in a statement today that its 10 executives bought a total of 464,000 company shares for about Rmb2.55mn over the past three trading sessions. This indicates their optimism about the company’s long-term prospects and their conviction that the current share price has been significantly undervalued, as the annual total share sales by executives are capped at 1/4 of their holdings as of the end of the previous year.
We believe that: 1. On a two- to three-year horizon, the dry bulk shipping market still follows a downward trend and the recovery, if any, should be limited. Therefore we still suggest investors to stay clear of stocks with strong cyclicality, including COSCO, CSC Nanjing Petroleum Transport and China Merchants Energy Shipping.
2. For CSD and COSCO Shipping with weak cyclicality, we also reiterate our previous call. Since BDI is expected to average at only 2,000~3,000 points next year, both the two companies have a further 20~30% downside in their 2009 earnings estimates, given the unfavorable industry trends. However, the two companies are unlikely to suffer a loss and investors may consider accumulating them if they are oversold (to 1x P/B, for example).
