COSCO shares rise on doubled profit

China COSCO Holdings Co, Asia's largest shipping company by market value, rose for a fifth day in Hong Kong trading, its longest winning streak this year, after annual profit doubled on the purchase of dry-bulk ships.

The world's largest operator of coal and iron-ore vessels jumped 7.95 percent to close at HK$22.4 in Hong Kong. The stock has gained 23 percent since April 16.

Its A shares in the Shanghai market climbed 1.73 percent up to 25.88 yuan yesterday.

The company said late on Tuesday its sales rose 37 percent to 108 billion yuan.

And net income rose to 19.5 billion yuan last year from 8.3 billion yuan, the Tianjin-based company said in a statement.

The results beat the company's December guidance of no less than 18.26 billion yuan.

"The results are better than the market expected, but its profit margins for container shipping declined, probably due to high costs, and the company now highly relies on its dry bulk operation," said Geoffrey Cheng, an analyst at Daiwa Institute of Research.

China COSCO has secured 54 percent of its dry-bulk operating revenue for 2008 as of Dec 31 at rates about a third higher than last year, it said late Tuesday. The company, already the country's largest container line, agreed to buy 412 dry-bulk ships from its parent last year because of China's surging commodities imports.

It expects to handle 1.1 trillion ton-miles of dry-bulk cargos this year. It carried 264.7 million tons of cargo last year, an increase of 15 percent. Revenue from bulk-shipping surged 79 percent to 49.3 billion yuan.

The company's container fleet is likely to boost its volume 37 percent this year to 6 million sea-cargo boxes.

Container traffic rose 12 percent last year to 5.71 million boxes because of China's surging exports of toys, furniture and other goods. Revenue from container-shipping jumped 14 percent to 45.8 billion yuan.

China COSCO may receive more assets, worth as much as 60 billion yuan, from parent, China Ocean Shipping (Group) Co, vice-chairman Zhang Fusheng said last month.

Agencies

(China Daily 04/24/2008 page15)