Archive for the 'Cosco' Category

Shipping giant China Cosco Holdings will add 64 vessels to its fleet of 144 container ships this year.

China’s top ship line will raise its 2008 capital expenditure by 37% to $3.32 billion to expand its fleet and port investments.

China Cosco’s net profits more than doubled last year, going up 134% (these three digit increases have astoundingly become commonplace) to $2.78 billion, compared with $1.14 billion in 2006.

Much of the increase in profits was attributable to China Cosco’s acquisition of a subsidiary owned by its parent company, Cosco Group, which owns the world’s largest dry-bulk shipping fleet.
Source: CargoNews Asia

Shares in Asian shipping companies are starting to stagnate because of concerns that rising costs could hurt earnings.

China Cosco Holdings, owner of the largest Asian container line, has seen its shares fall 25% this month from a record high July 31.

Neptune Orient Lines, which operates the region’s fourth-largest container line, has dropped 34% since peaking last month. Its costs will rise 1% in the second half, twice as fast as in the first, as fuel prices rise.

Alex Chang, an analyst with UBS in Hong Kong is not optiministic. Energy costs have jumped more than 30% this year and surcharges to move containers in and out of ports are rising, undermining shipping lines’ efforts to stem two years of profit declines. The companies are also paying more for vessels as shipbuilders charge higher prices because, paradoxically, of a flood of orders. Orders are made long before any market variations can be intelligently predict.

The 20 biggest Asian container shipping lines by market capitalization are valued, on average, at 30 times earnings. That exceeds the average multiple of 21 for the Bloomberg World Transportation index of 108 companies.

The price of ship fuel climbed to a record high last month after crude oil reached the highest level in more than 11 months. The prices are increasing largely because of demand from China. According to Mirae Asset Securities in Seoul bunker fuel costs make up as much as 15% of a shipping line’s total expenses.
Source: International Herald Tribune

China Cosco Holdings runs Asia’s largest container line. It intends to get bigger. It is setting up one of the biggest share sale in China this year which may raise as much as RMB15.1 billion ($1.98) and it will be used to buy new ships.

The company is based in Tianjin and will sell 1.78 billion shares in Shanghai at RMB7.60 to 8.48 each. The sale will probably be the fourth biggest of those approved in China so far this year.

The money will be used for a dozen new ships and to buy a 51% stake in Cosco Logistics from its state-owned parent Cosco Group and another RMB401 million for projects being developed by the logistics unit.

Edward Wong, an analyst with Quam Ltd. in Hong Kong, said, ‘The outlook for container shipping has improved and freight rates are recovering. It’s also the right time to raise funds as investors are still willing to pay a higher valuation for Chinese stocks.”

It will be sailing into competitive waters. The global container fleet’s capacity may increase about 14% over the next two years, while demand may expand 12%. This according to Credit Suisse Group.

Cosco runs 139 vessels with a combined capacity of 399,237 twenty-foot equivalent units. AP Moeller-Maersk A/S, owner of the world’s largest container line, had a total capacity of 11.3 million units so Cosco still has a way to go.
Source: Bloomberg

China COSCO Holdings may have China’s largest share sale outside the finance sector this year as it seeks funds to expand Asia’s biggest container-shipping line. The China Securities Regulatory Commission Monday has approved China COSCO’s sale.

The company will sell as many as 1.78 billion shares, a 20% stake, in a Shanghai public offering.

China COSCO’s sale may raise as much as RMB16.8 billion ($2.2 billion.) The statement did not give a price range for the sale of Tianjin-based China COSCO or say how much the company plans to raise. Bloomberg News calculated the maximum amount collected by multiplying the number of shares on sale with the price of the company’s Hong Kong-traded shares, which closed Monday at RMB9.34 (HK$9.54.)

China COSCO plans to use RMB6 billion ($.78 billion) of the proceeds to help its container-shipping subsidiary pay for 12 new vessels.

Geoffrey Cheng, a Hong Kong-based analyst at Daiwa Institute of Research (HK), said, ‘Investors will probably be attracted to the company as there isn’t another comparable container-shipping line listed in China.’

China COSCO raised RMB9.32 billion ($1.24 billion) in an initial public offering in Hong Kong in June 2005. The shares, which rose 1.3% Monday, have more than doubled from their IPO price.
Source: The Standard

COSCO, China’s leading shipping and logistics service provider, is going to use four domestic shipyards to build 66 ships. Zhang Fusheng, a COSCO spokesman said the cost was a record amount for the shipping giant although he did not give precise details.

Wu Bangguo, Chairman of the Standing Committee of China’s National People’s Congress, attended the signing ceremony on the sidelines of the annual conference of the Boao Forum for Asia.

The 66 ships — including container ships, bulk cargo ships, oil tanker and car carriers — will have a total deadweight tonnage of 5.14 million.

They will be built by four domestic firms, including China Shipbuilding Industry, COSCO Shipbuilding Industry and COSCO Shipyard Group (which keeps a lot of it in the family) and will be delivered between 2008 and 2010.

COSCO currently owns 740 ships, with a total capacity of 46 million dwt.
Source: China View

A most unusual move by Matson Navigation and J.B. Hunt Transport Services. Together they are offering money-back guarantees on shipments from China. No other shipper appears to offer any such guarantee.

Under this new system shippers can order single-invoice shipping from Ningbo and Shanghai to Long Beach, California with Matson guaranteeing a percentage refund for packages not arriving at selected destinations by a stated date.

Or, a second option, the idea can be exteneded beyond there to include transportation to selected U.S destinations which is where J.B. Hunt, one of America’s largest transportation logistics companies, comes in. J.B. Hunt uses outsized 53-foot containers that allow consolidation of cargo from ocean containers into a smaller number of domestic containers.

A recent Drewry Shipping Consultants survey ranked Matson as the No. 1 on-time carrier in the world. Matson’s transit time from Shanghai is typically 11 days with next day cargo availability in Long Beach.
Source: Pacific Business News

According to Korean Donga.com, the Chinese shipping industry recently overtook the Korean industry in bulk freight and container freight.

France-based shipping intelligence firm, AXS-Alphaliner, said yesterday, that China Shipping and Cosco ranked 6th and 7th in the world in terms of cargo capacity. They recorded 406,000 TEUs and 390,000 TEUs respectively. China Shipping registered an annual growth of 24.5% and Cosco grew by 10% annually between 2000 and 2006.

Korean shipping companies, in contrast, experienced a drop in profits last year. Hanjin Shipping, for example, posted profits of KRW149.1 billion, a quarter of the profits it recorded in the previous year. 
Source: Donga.com