Cosco (F83.SG) +2.1% at $1.98 at 31-month high after reporting 3Q net profit +147% on-year, but further gains likely limited as mixed outlook for dry bulk orders cloud sentiment on stock.

Credit Suisse keeps Underperform rating, ups target to $1.50 vs $1.20 on higher FY10, FY11 forecasts (9-month revenue makes up 79% of FY10 view), but keeps order assumptions unchanged; notes management’s cautious outlook, highlighting oversupply in bulk carrier market, company’s belief 2011 order intake to be flat on-year (CS tips US$2.3 billion ($2.96 billion) 2010). 

 

“At the same time, margins may be negatively impacted by a number of headwinds, including wage inflation (5.0% on-year), raw material cost inflation, and an appreciating CNY vs USD”. Orderbook quotes suggest $1.99, also intraday high, likely cap for day.