虽然我觉得是有人故意这么写的，不单单是cosco，很多行业很多公司现在都面临下面的问题，为什么偏偏是cosco?幕后推手到底是谁？
The Cycle has peaked
Bad news, bad news and more bad news. Since our last report dated 8 Sept 08, the drastic changes in macroeconomic factors over the past two weeks have ended the shipping multi-year boom cycle abruptly, in our view. The market for capital-intensive bulk carriers, already under close scrutiny from influx of new supply entering the market in 2009 and falling freight rates (a decline of 67% from 8 Sept), are now challenged with virtually no order demand, delivery delays and cancellation possibilities. We believe as China's leading shipyard with 115 bulk carrier newbuilds in the orderbook, Cosco Corporation (Cosco)'s near-to-medium term visibility has become clouded.
Bad News #1: MPF Corp's bankruptcy – tip of the iceberg. In late Sept, Upstream reported that Cosco's customer MPF Corp was pushed into bankruptcy after failing to secure funding to finance its FDPSO newbuild. While Cosco has informed that it had received 80% of the contract value of US$120m (or US$96m), we estimate the outstanding amount owed by MPF Corp for the construction work to be US$48m (assuming 20% cost escalation on the contract value).
Bad News #2: Weak customer profile would lead to cancellations. The tightened global liquidity poses financing difficulties which has inevitably led to order cancellations, as seen from Daewoo Shipbuilding (world's third-largest shipbuilder) and Hyundai Mipo (world's fourth-largest shipyard). Both experienced order cancellations from European customers in late Aug. We re-looked into Cosco's customers' profile, funding abilities and the possibility of payment default in the face of the current credit situation. Insufficient disclosure on Cosco's customers' profile has heightened our concerns that a heavy concentration of bulk carrier newbuilds in its orderbook are ordered by smaller ship owners with weak balance sheets and poor financing means. In the wake of the credit crunch, these smaller ship owners may have difficulties financing the new ships as banks tightened the lending. This may potentially lead to further cancellations. Hence, we factor in approximately 20% cancellation orders from Cosco's orderbook in our estimates resulting in a downward revision of 14% for FY09 earnings and expect earnings to contract 20% for FY10 earnings. No change has been made to our FY08 earnings.
Bad News #3: Execution at high risk. We remain concerned on the increasing possibility of slippage in vessel deliveries based on slower than expected recognition (as compared to our estimates) and the apparent delay in the delivery of the first dry bulk vessel (scheduled for delivery in Jun 08). The management has previously guided that 7-10 vessels would be delivered by the end of this year, but we fear that even these vessels may not be completed on schedule.
Bad News #4: Shipping cycle has peaked - New order flow to slow: We expect new orders from dry bulk shipping to come to a virtual halt due to ship financing difficulties as well as a depressed outlook in view of the falling Baltic Dry Index. On the offshore marine front, we understand that Cosco is still currently in negotiations with Sevan Marine on its two recently exercised options. We believe the negotiations may be dragged due to financing issues.
Downgrade to SELL, target price revised down to S$0.86. We are reducing our target price estimate for Cosco by switching our valuation methodology from Sum-of-the-parts valuation to P/B trough valuation, with reference made to historical P/B in 2002-2003 (prior to the shipbuilding boom) in this recessionary climate. We peg the valuation parameter of 1.2x P/B FY09, deriving a target price of S$0.86 (from S$2.85 previously). We believe the share price is likely to be pressured over possible cancellation orders, delivery delays and limited new orders in the near term. At our target, Cosco's shares would trade at 4.7x FY09 P/E and 1.1 EV/EBITDA. We will revisit our valuation parameter should global conditions turn for the better as well as upon seeking more clarity on the customers' profile and delivery schedules. Downgrade to SELL.