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SHIPPING & MARINE | Staff Reporter, Hong Kong
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COSCO Pacific pops the champagne on 7.5% container volume growth

Guess which was the largest contributor.

According to Barclays Research, after the Hong Kong market close on Tuesday 15 Jan 2013, COSCO Pacific announced Dec 2012 container volume growth of +7.5% y/y. 

December 2012 underlying container volumes +7.5% y/y: COSCO Pacific's Dec 2012 underlying container volumes were +7.5% y/y, after adjusting for acquisitions and disposals. FY2012 volumes were +9.8% y/y, closely matching expectation for +10% annual throughput growth.

Here's more from Barclays:

Volumes at Qingdao port, which was the largest contributor to total throughput with a 25.2% share, saw FY2012 volumes increase +13.1% y/y. COSCO Pacific's FY2012 throughput of +9.8% y/y is comparable to China Merchants' +4.4% y/y. 

Positive read-through for HPH Trust (HPHT SP, EW): Dec 2012 volumes through the port of Yantian were 0.9mn teus, +3.0 % y/y while FY2012 volumes were +3.9%. Yantian is the primary asset of HPH Trust.

Our price target of HK$15.30 is derived from 1.3x FY13E P/B. COSCO Pacific is our top pick in the ports space, and we expect a continuing turnaround from underperforming port assets to drive the company's EPS growth. On a P/E basis, COSCO Pacific is trading at 9.9x 2013E P/E, compared with China Merchants' 14.1x and HPH Trust's 16.5x, after adjusting for normalized depreciation for the trust. 

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