Could privatisation be a catalyst for COSCO?

SINGAPORE (Aug 10): DBS Vickers Securities is keeping its “hold” call on COSCO Corporation at a target price of 30 cents, highlighting potential mergers and acquisitions (M&A) as a re-rating catalyst. 

In a Monday report, analyst Ho Pei Hwa says while there are limited re-rating catalysts for COSCO in the near term, she continues to see there is a possibility of its privatisation by its parent, COSCO Group, in the subsequent phases of its restructuring and China Shipping Group’s.

Although the first phase of restructuring does not involve COSCO’s business segments, Ho does not rule out the possibility of further restructuring in the future as China Shipping also owns a small shipyard. Additionally, COSCO has a bulk carrier fleet that may be injected into the merged entity, which could be yet another re-rating catalyst for the corporation.

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