[ET Net News Agency, 9 October 2018] J.P. Morgan assumed coverage of COSCO Shipping
Holdings (01919) with a "neutral" rating and a target price of HK$3.1 (from an
"overweight" rating and a price target of HK$4.1).
The research house said the acquisition of OOIL (00316) has catapulted COSCO to being
the third-largest liner globally. That said, the resulting higher financial leverage
(FY2018 net gearing surged to 2x, versus 86%) increases the risk of further capital calls,
while synergies with OOIL may take longer-than-expected time to materialize.
JPM believes that near-term synergies with OOIL may be lower than expected given the
plan to retain OOIL's brand and management. (KL)