DJ MARKET TALK: More Downside To YZJ, Cosco's GFC Valuations -Kim Eng ... Bill E's Take : I think Cosco has found a temporary bottom at 96c ...

DJ MARKET TALK: More Downside To YZJ, Cosco's GFC Valuations -Kim Eng   22/08/2011 14:54   0653 GMT [Dow Jones] China-based shipbuilders Cosco Corp (F83.SG) and Yangzijiang Shipbuilding (BS6.SG) extend recent falls in heavy volume, down 0.5% at S$0.970 and off 1.6% at S$0.955 respectively, which Kim Eng puts down to "a grimmer outlook" for Chinese shipbuilders "in the face of a slower order flow and rising costs from labour, raw materials and yuan appreciation." It notes Cosco is down almost 60% from its January 2011 high of S$2.42. It says in 2008, Cosco traded at trough P/B of 1.44X and applying the same multiple translates to floor value of S$0.77, based on NAV of S$0.535. It adds Yangzijiang is acknowledged as one of the more efficient shipyards in China, but "we do not think it will be immune to the current predicament." Further, Yangzijiang traded at trough P/B of 1.2X during the global financial crisis, implying a floor value of S$0.75, though the house notes continued share price weakness has prompted several insiders, including its Executive Chairman, to resume open market purchases. (matthew.allen@dowjones.com) Bill E's Take : I think Cosco has found a temporary bottom at 96c  .