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ABN AMRO expects higher earnings for CSCL
POSTED: 9:07 a.m. EDT, June 28,2007
ABN AMRO Bank has given a 'buy' rating to Hong Kong-listed China Shipping Container Lines' shares and raised its target price from HK$4.44 to $5.70 (US$0.57-0.73).
This comes amid predictions that one of the world's top 10 container lines will see its earnings grow by 26 per cent this year and by 19 per cent in 2008 due to improved freight rates and reduced costs, Xinhua reports.
By comparison, the management of CSCL is forecasting 20 per cent growth this year after its cargo volumes rose by 32 per cent in the first quarter compared to the same period last year.
According to ABN's forecast, CSCL will achieve a net profit of CNY2.31 billion (US$303.21 million) in 2007, CNY3.9 billion in 2008 and CNY4.9 billion in 2009. It also expects a dividend yield of 2.28 per cent this year, 4.07 per cent in 2008, and 5.11 per cent in 2009, with a price-to-earning ratio of 6.91, 4.33 and 3.1 for these three consecutive years.
CSCL's freight rates on pan-Pacific routes including the US east and west coasts have increased by five per cent since May. The shipping line also expects rates on the Asia-Europe route to be stronger over the rest of the year than in the first quarter.
CSCL currently controls more than half of the domestic China liner shipping market, although ABN warned that competition is expected to become stiffer this year among carriers. |
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