2025-11-05 02:30COSCO SHIPPING Holdings (601919.SS) Analyst Briefing Summary Company Overview - Company: COSCO SHIPPING Holdings - Stock Codes: 601919.SS (A-shares), 1919.HK (H-shares) - Market Cap: Rmb240.7 billion / $33.8 billion - Enterprise Value: Rmb123.2 billion / $17.3 billion - Current Price: Rmb15.03 (A-shares), HK$13.67 (H-shares) - 12-month Price Target: Rmb16.00 (A-shares), HK$12.50 (H-shares) Key Takeaways from the Analyst Briefing Industry Outlook - Management is cautiously optimistic about long-term industry freight rates due to: - Over 25% of existing containerships exceeding 20 years of age by 2028-30, necessitating scrapping under decarbonization regulations [2][3] - Strong cargo volume growth, particularly from Southeast Asia, Europe, and Africa routes [2][19] Q3 Performance Highlights - Earnings Beat: Q3 earnings exceeded expectations, attributed to: - Higher freight rates from increased exposure to intra-Asia routes [2][23] - Lower costs compared to peers, with container shipping costs rising 6% YoY but unit costs only increasing 1% YoY [23] - Spot Rate Increase: A pick-up in spot rates was observed in October, driven by strong demand ahead of Black Friday and frontloading due to anticipated US tariffs on Chinese goods [2][23] Financial Metrics - Revenue Forecasts: - 2025E: Rmb211,746.6 million - 2026E: Rmb205,699.3 million - 2027E: Rmb206,546.4 million [17] - EBITDA: - 2025E: Rmb50,426.7 million - 2026E: Rmb41,488.5 million - 2027E: Rmb37,791.5 million [17] - EPS: - 2025E: Rmb1.92 - 2026E: Rmb1.28 - 2027E: Rmb0.95 [17] Cost Management - The company has maintained a lower unit fuel cost compared to peers, attributed to higher fuel efficiency and a greater proportion of self-owned vessels [23] Capital Expenditure - As of September 2025, COSCO has a Rmb57.8 billion capital expenditure commitment, with Rmb53.8 billion allocated for new vessel construction [23] Regulatory Impact - The delay of USTR port fees (Rmb2 billion) on China-built and operated vessels has positively impacted the financial outlook, leading to a revision of net profit forecasts for 2025-27E by 25% to 46% [21][22] Market Position - COSCO holds the 4th largest container fleet globally, with a capacity of 3.2 million TEU as of 1H24 [29] Risks and Considerations - Upside Risks: - Unexpected events leading to a reduction in effective capacity - Potential special dividend payouts [28][31] - Downside Risks: - Faster-than-expected new ship deliveries - Weaker-than-expected global trade demand [28][31] Conclusion - COSCO SHIPPING Holdings is positioned to benefit from long-term industry trends despite current market challenges. The company’s focus on cost management and strategic route exposure has allowed it to outperform peers in Q3, while regulatory changes have provided a more favorable financial outlook. The investment rating remains Neutral due to ongoing uncertainties in global trade dynamics and shipping rates.