Has #ideas2invest been useful to you?
Please click here to share your feedback.
With the container shipping boom, we will finally see an increase in container handling charges for Chinese ports this year. This is in contrast to a decade of flattish container handling charges, as terminals had to offer discounts to help struggling liners previously.
DBS Group Research projects core earnings for port operators under our coverage to continue steady growth in 2022 and 2023. This will put them well above their pre-COVID levels of profitability. Meanwhile, share prices have just only recently recovered close to their pre-COVID levels, clearly a delayed response to the operators’ profitability.
Ready to act now?
Simply click on the stock or fund name below for direct access to our online trading platforms.
Steady growth plays
Our top picks are China Merchants Port and COSCO Shipping Ports with FY22F yields of 6.7% and 5.6%, both trading at a 0.5x P/BV against projected FY22F ROEs of 8.2% and 6.6%, respectively.
Valuations are attractive despite improving profitability ahead, on the back of higher container handling charges, storage income, and throughput volumes.
Not a DBS client?
Open a trading account with us today.
5-min article
2-min video
2-min video
5-min article
