Cosco Shipping Holdings Rises After Bullish First-Quarter Guidance

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By Ben Otto

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Cosco Shipping Holdings Co. Shares are trading higher in the morning session after the Chinese shipping company released guidance for a steep rise in first-quarter profit.

Shares rose as much as 9.2% to 14.92 Hong Kong dollars early Friday after the company said it expects first-quarter profit to rise 79% from a year earlier to 27.6 billion yuan ($4.35 billion). It said it also expects a near doubling in earnings before interest and taxes to CNY39.3 billion.

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In the first quarter, the company said it “overcame the impact of multiple factors including the global pandemic, the shortage of shipping capacity and the sluggishness in the global supply chain.”

The higher guidance comes after the company’s net profit soared in 2021, roughly in line with analyst expectations, as a steep jump in average freight rates pushed revenue to nearly double to CNY333.7 billion.

Bocom International maintained a buy rating and target price of HK$15.70 on Cosco Shipping shares, citing elevated freight rates while noting its forecasts are now under review.

Bocom said in a research note that it expects Cosco Shipping’s container volume rates to remain mild in 2022 at a time of sustained supply-chain disruptions and “potential soft demand growth.”

But “we expect [the] supply chain crisis to persist in [the first half of the year] and underpin spot freight rates at high levels,” it said.

Write to Ben Otto at [email protected]

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Credit: www.marketwatch.com /

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