The Straits Times / The Business Times News on Cosco

Directors' Trades: COSCO INSIDERS SELL 11.5M SHARES

A SPATE of sales of Cosco Corp shares by company insiders has not gone unnoticed in the market.

In a note last week, Citigroup Investment Research said the China ship-repair firm's key management team 'has collectively sold 11.5 million shares over the past 12 months'.

This accounted for 0.5 per cent of the company's outstanding shares, and cut the insiders' stakes by between 17 per cent and 93 per cent each.

One big seller was Mr Ji Hai Sheng, Cosco's vice-chairman and president, who sold 1.6 million shares between April and August last year.

Others included Mr Li Jian Hong, a non-executive director, who sold 1.2 million shares last April, and Mr Li Jian Xiong, an alternate director, who has sold 1.3 million shares over the past 11 months.

Against this backdrop, Citigroup felt that Cosco is pricey, with valuations 'already capturing much of its strong position in China and growth potential'.

This is because Cosco's offshore business already trades at a premium of 128 per cent to 157 per cent over market leaders such as Keppel Offshore and Marine and SembCorp Marine.

'We think this is difficult to justify...as the company just recently moved into the offshore equipment construction business,' said Citigroup, which initiated coverage on the stock with a 'sell' call.

Separately, Cosco said yesterday it had won a US$35 million (S$53 million) contract to convert an oil tanker to a floating production offloading and storage vessel at its Dalian shipyard.

Yesterday, Cosco ended two cents down at $2.80, with 7.94 million shares traded.