1138 HK Cosco Shipping Energy - Target 4.65

COSCO Shipping Energy (1138 HK): Strength of Turning Around

COSCO Shipping Energy (1138 HK): Delivered as Promised

DFRS Tanker Shipping Outlook 2017 - Returns Unlikely Before 2018, Further Dividend Cuts Likely

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Equity Bottom-Up

Cosco Shipping Energy Transportation Co. Ltd. (H) / Equity Bottom-Up

Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H)

No-moat Cosco Shipping Energy Transportation’s, or CSET’s, 2016 net income is expected to increase by 48%-72% to CNY 1.8 billion-CNY 2.1 billion. The results trail our 2016 earnings estimate of CNY 2.6 billion. Management attributed the earnings growth to disposal of its dry bulk shipping business, government subsidies, and effective cost control measures.We are maintaining our earnings forecasts and fair value estimate of HKD 3.70 for the company, pending more detailed information from its final results in March. We maintain our long-term thesis that the tanker freight rate will weaken, given the rising tanker supply and higher crude oil price that impede oil shipping demand. As such, we think CSET is overvalued at current levels.Analyst: Chokwai Lee

No-moat Cosco Shipping Energy Transportation’s, or CSET’s, 2016 net income is expected to increase by 48%-72% to CNY 1.8 billion-CNY 2.1 billion. The results trail our 2016 earnings estimate of CNY 2.6 billion. Management attributed the earnings growth to disposal of its dry bulk shipping business, government subsidies, and effective cost control measures.We are maintaining our earnings forecasts and fair value estimate of HKD 3.70 for the company, pending more detailed information from its final results in March. We maintain our long-term thesis that the tanker freight rate will weaken, given the rising tanker supply and higher crude oil price that impede oil shipping demand. As such, we think CSET is overvalued at current levels.Analyst: Chokwai Lee

CSET's 2016 Preliminary Results Trail Our Expectations; Fair Value Estimate Maintained