CIMB Report - 11 Jan 2008

What’s on the table

Cosco Corporation (S$5.70) – Secular winner on abundant yard space The recent formation of a new JV, Cosco Lianyungang Shipyard, is in line with Cosco’s objective of expanding its group shipyard capacity to meet increasing demand for shipbuilding and shiprepair services.

The growth in the international seaborne dry bulk trade for commodities will likely continue into 2008, sustaining orders for higher-tonnage bulk carriers as shipowners maximise their operational efficiencies by increasing tonne-miles.

We have raised our FY09 earnings estimate by 5% to incorporate the new yard and higher order-win assumptions. Maintain Outperform with target price raised to S$9.09 from S$8.60, still based on sum-of-the-parts valuation and incorporating revised market values for the shipping segment.

Quick Takes

· Jadason Enterprise (S$0.135) - Slow start
· Lian Beng Group (S$0.74) - 1HFY08 results - Waiting with bated breath

News of the Day

· New STI off to a sedate start as US worries loom
· Phoenix site to rise again as hotel-retail complex
· Hotel sector shaping up for bumper takings
· CityVibe put up for sale at $140m
· SIA introduces another daily flight between Changi and Sydney
· DBS involved in US$140m India deal
· New contracts boost CSC's order book to $330m
· Banyan goes to UAE's Saraya Islands
· Ong Soon Kiat back at the helm of Goldtron