Stock Upgraded: Cosco target price raise to 2.57 by CIMB-GK

CIMB-GK Research has raised its target price for Cosco Corp (Singapore) Ltd to 2.57 sgd from 2.17 after its unit Cosco Shipyard Group (CSG) won conversion contracts together worth 106 mln usd. CIMB-GK estimates the latest contract will bring CSG's order book to 785 mln sgd, of which 80 pct may be recognized next year. "Cosco's order book visibility is growing much better than anticipated. The bread and butter business is looking much more exciting than previously thought,' CIMB-GK said. On the back of the new contracts, CIMB-GK said it has lifted its earnings estimates for 2007 and 2008 by 16 pct and 3 pct, respectively. "Cosco's contract win momentum is not spent yet. We anticipate this based on the massive capacity expansion coming through on its Zhoushan (China) yard (that will) increase group capacity by 30 pct by mid-2007," CIMB-GK said, adding Cosco may also secure an order for a full jack-up oil rig soon. At 9.44 am, Cosco was up 0.02 sgd or 0.96 pct at 2.11 with 3.42 mln shares traded. SembCorp Marine Ltd, which holds a stake in both CSG and Cosco Singapore, added 0.04 sgd at 3.26.