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Cosco (F83.SG) pares early gains, flat at $1.61 in thin trade vs $1.63 earlier, with interest subdued after yesterday’s run-up to 4-week high.
“While we believe Cosco deserves a premium for its SOE (state-owned enterprise) status and offshore capabilities, prevailing valuations appear rich relative to peers,” says Nomura, notes stock trades at 20x FY11 P/E.
Keeps Reduce call but lifts target to $1.34 from $0.80 after increasing FY10-11 EPS estimates by 18%-24% to account for strong 1H10 results (net profit +43% on year at $100 million).
Despite current thin interest, stock still holding tad better than most Singapore blue chips, +8.1% since beginning 2H10 vs STI +5.3% over same period.
Orderbook quotes tip $1.58–$1.64 trading band for time being.
