Chinese Port Operators - Core Earnings Remain Weak

Cosco Shipping Ports (1199 HK) – Drawing Ocean Alliance to Back Latest Acquisition

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

In our earlier updates we looked at the macros of the Chinese port operators and key regional developments, <a href="https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters" target="_blank">https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters</a>, <a href="https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update" target="_blank">https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update</a>. In this last update we look at the individual listed operators. <ul><li>Current valuations of Chinese operators are slow to reflect weak earnings, while the market has downshifted valuations of non-Chinese peers. Chinese operators stand to weaken further when deteriorating earnings momentum becomes apparent in upcoming results.</li><li>Chinese operators have improved their net gearing profiles in the past six months, adopting a more cautious approach to the balance sheet leveraging. With parental support and connection with strong affiliates, none of the Chinese operators falls under the High investment risk category. </li></ul>

In our earlier updates we looked at the macros of the Chinese port operators and key regional developments, https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters, https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update. In this last update we look at the individual listed operators. Current valuations of Chinese operators are slow to reflect weak earnings, while the market has downshifted valuations of non-Chinese peers. Chinese operators stand to weaken further when deteriorating earnings momentum becomes apparent in upcoming results.Chinese operators have improved their net gearing profiles in the past six months, adopting a more cautious approach to the balance sheet leveraging. With parental support and connection with strong affiliates, none of the Chinese operators falls under the High investment risk category. 

DMER - Chinese Port Operators 3.0 -Cosco Shipping Ports Our Top Pick, Dalian Port Least Favoured