Newsletter summary

Bank of America Securities upgrades COSCO Sea Holdings (01919) to "Buy"BgobingoThe target price is from 9.Bgobingo.2 to 10 Hong Kong dollarsBgobingo.5 Hong Kong dollars, earnings are expected to remain strong.

Text of news flash

[bank of America Securities: raise the target price of COSCO Sea Control (601919) to HK $10.50] Bank of America Securities released a research report a few days ago, reiterating the "buy" rating of COSCO Sea Control (01919). Cosco raised its target price from HK $9.2 to HK $10.50, given that its earnings per share forecast for the period from 2024 to 2026 was cut by an average of 4 per cent. The report pointed out that Cosco Marine Control's actual freight rates were weak in the first quarter of 2024, resulting in slightly lower-than-expected results. However, affected by the Red Sea crisis, its container profit margin before interest and tax is as high as 19%, showing strong profitability. BofA Securities forecasts that Cosco's earnings are expected to remain strong for a longer period of time due to recent increases in spot freight charges and the unlikely resumption of Red Sea navigation in the short term, which is not fully reflected in market valuations. Bank of America Securities said that while Cosco's short-term results were affected by weak freight rates, the company's profit outlook remained optimistic in the long run. As a result, the agency is up-regulated.BgobingoThe target price of COSCO Sea Control was set and the "buy" rating was maintained.

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