Last Friday, Cosco reported another substantial loss in 1Q17. Total net provisions for bad debts, obsolete inventory and cost overruns have amounted to $850 million since 4Q14, wiping out 81% of its NTA. The shrinking book value and growing debt have pushed net gearing to an alarmingly high 21x.
SINGAPORE (May 8): DBS is maintaining its “hold” call on Cosco Shipping International (S) after the proposed buyout of shipyard units by its parent eliminates insolvency risk.
“Existing investors could hold on for more clarity on future direction of Cosco and potential parental asset injection,” says analyst Ho Pei Hwa in a Monday report.
