Kim Eng notes both Cosco Corp. (F83.SG), Yangzijiang (BS6.SG) have seen raft of new shipbuilding orders recently, reportedly on back of China financing arrangements. But says despite positive news (Cosco Monday announced contract to build three bulk carriers worth US$87 million($112.2 million)), Cosco has lagged Singapore, Korean, HK-listed peers. Cosco trading at 76% discount vs 2007 peak of $7.90 vs peers trading at average 60% discount. “Overall, we expect the positives in the ship building sector to continue and eventually witness this in upside to Cosco’s share price.” 

Adds, it’s matter of time before Chinese money finances more offshore projects, Cosco has competitive edge among Chinese yards due to track record, repertoire in segment. With Cosco, +0.5% at $1.89, off 1-year peak of $1.96, “this is still an attractive price to enter because of how far it lags its peers,” though house keen to wait for earnings due Wednesday, before buying.