Review of Cosco Shipping (1919.HK)

I hold 130,000 shares of Cosco Shipping Holdings at an average cost of $11.73 HKD.

This stock pay a dividend of $2.21 HKD in Dec 2022. My cost has reduced to $9.52. The current price is $7.84 giving me a loss of 18% ($37,000 SGD).

I cannot understand why the stock price is so low. At the current price, the PE ratio is 0.97 times and the dividend yield is 42%.

The quarterly financial figures showed that the earnings for 2022 is likely to be 20% higher than 2021.

I expect that this stock will give another bumper dividend after the close of the 2022 results. Maybe, the dividend will be another $2.21 per share.

The debt is 39% of equity, which is quite low.

The forward PE ratio for this stock is 4.2 times, based on the analysts estimate. This suggest that the profit is likely to drop by 4 times. This is probably likely to occur for 2023, assuming that the capacity oversupply brings down the earnings.

I have read forecasts that the earnings are likely to drop by 60% annually over the next few years. I find this forecast to be speculative. I did not see any report to substantiate it.

The stock trades in Hong Kong at a discount of 33% from the price in Shanghai. Overall, I find the fundamentals to be excellent. I will hold on to the stock until the release of the 2022 financial results and review my decision at that time.

Note - I am giving an observation. I am not giving financial advice.

Tan Kin Lian
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