COSCO SHIPPING Ports Ltd's (CSP, 1199 HK) 1Q19 results were within expectations. Adjusted PATMI rose by 4.7% YoY to S$72.5m – this excludes a one-off dilution effect of equity interests in QPI of US$22.6m. If we also exclude a US$2.9m impact from the new HKFRS 16 reporting standards, adjusted PATMI would have increased 8.9% YoY to US$75.4m.

In terms of throughput, total throughput increased by 5.6% YoY to 28.7m TEU while equity throughput increased by 7.7% to 9.3m TEU. As noted in our last report, we expected throughput data to come in soft for 1Q19F given the likely frontloading of orders in 4Q18 ahead of the previously scheduled tax hike. Management is still sticking to its full-year target of low doubledigit growth for total throughput.

We maintain BUY on CSP (1199 HK) but place our fair value of HK$9.79 under review.

Source: OCBC Research - 26 Apr 2019