Emily Vandenberghe Mr. Applin Accounting – 4 2 April 2012

General Information  COSTCO Pacific’s Headquarters is in Hong Kong.  It is a state-owned enterprise (Red chip).  “Our vision is to transform our business model by becoming a leading global port operator and by focusing on ports as the principal earnings driver.”

Background  COSCO Pacific was founded in  It’s industry is container leasing.  It’s parent company established COSCO Pacific due to the companies growth.  The company is comprised of more than 1,000 employees all over the world.

Corporate Structure

Source of Income  COSCO Pacific is mainly engaged in container terminal operations, container manufacturing and leasing, shipping agency and freight forwarding.  COSCO Pacific is the fifth largest terminal operator in the world and a leading terminal operator in China.  COSCO Pacific Ltd. had revenues for the full year 2011 of $599.2M. This was 34.2% above the prior year's results.

Terminal Operator  COSCO Pacific is the flagship of China Ocean Shipping (Group) Company for terminal business with wide-ranging terminal network and port portfolio in both China and overseas.  throughput growing a compound annual grower rate of 12.9% for the past five years.  COSCO Pacific has investments in overseas container terminals such as Singapore, Antwerp in Belgium, Port Said in Egypt and Piraeus Terminal in Greece.  COSCO Pacific has 27 joint venture terminal operations.

Container Leasing, Management and Sales  Florens Container Holdings Limited, a wholly owned subsidiary of COSCO Pacific, and its subsidiaries, operates container leasing and management business for the Group.  Florens is the second largest container leasing company in the world with 1.63 million TEUs fleet size as at the end of 2010  It maintains a high utilization rate that is above market average.  While continuing to focus on long-term leases, Florens is also aiming to expand market share by striking an optimum balance between ownership and management of its container boxes based on an “asset light” business model.

Worldwide Network For Container Leasing, Management and Sales

Container Manufacturing  COSCO Pacific holds an approximately 21.8% equity interest in China International Marine Containers (Group) Co. (CIMC).  CIMC is primarily engaged in the manufacturing and sale of modern traffic and transport equipment.  It is the largest container manufacturer in the world in terms of annual container output and sales volume.  Container products range from dry, reefer, tank and various special containers.

Income Statement Evolution

Stock Price History Highest share price (HK$) Lowest share price (HK$) Average share price (HK$) Orange: Closing price on Dec. 31 st Blue: Market Capitalization

Stock Prices  The current stock price is   (+1.22%)  The high is  The low is  According to the previous chart, was their record high and 1.72o was their record low.

Dividend  According to investopedia.com, dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.  COSCO Pacific’s current dividend is 5.80%

Dividend History Blue: Total (US cents) Orange: Payout ratio (Full year) (%)

Strengths of the Company  COSCO Pacific operates all over the world and is given many opportunities to grow.  This allows the company to meet with new investors and gain profit.  COSCO Pacific has always regarded investor relations as an important aspect of corporate governance.  As such, their investor relations team sets out to provide an efficient two-way communication channel between senior management and investors.  In addition, they release information according to standards higher than those of the disclosure regulations governing the Company's listing.

Weaknesses  Share price rallies, combined with a renewed downturn in momentum, means they have become more negative on container shipping in the short term.  Longer-than-expected slowdown in global trade that causes a derating of the port sector. Any delay in a turnaround of the company’s recent investments could also pose a downside risk to their earnings and valuation.  COSCO Pacific’s stock prices have decreased by over half since 2007.

Opportunities  The rapid economic growth in China will give a huge advantage to COSCO Pacific.  It will allow the company to expand and gain new investors.  “Our key strategy to capture terminal investment opportunities is to further strengthen our carrier-terminal partnerships with other port operators and major liner operators.”  COSCO Pacific’s continued focus on the environment and community will allow the company to connect with the people and show them that they care about the world.

Threats  Container shippers have had the weakest momentum within the transport sector. Generally, weak earnings momentum for the liners is another short-term share price risk.  Container manufacturing business faces some near-term risks.  New companies continue to rise, threatening COSCO Pacific’s dominating position.

Awards and Recognition  Won the "Best Investor Relations in Transport Sector" and "Best Overall Investor Relations by a Hong Kong Company" by IR magazine.  Included as one of the Top 10 Enterprises by China Shipping Gazette.  Rated one of the best corporate governance of Chinese companies by CLSA for the third consecutive year.  Ranked No.7 in best investor relations and No.3 of the best financial management in China in the poll of "2000 Best Managed Companies in Asia" by Asiamoney magazine.  Etc.

Recommendation  I would recommend purchasing stock from COSCO Pacific.  Though the price is not at a current low, the stock continues to rise for the company and it would be wise to invest in it before it reaches it’s high again, then sell it at that point in time.

Works Cited  mpany_profile.php  g-at-COSCO-Pacific-EI_IE ,24.htm  r/financial_report/ear2010_13.pdf  DV?p=pdf&key=Crs9nSep3V&n= PDF