Jefferies tips Cosco for profit fall as box rates dip

Jefferies is expecting a fall in profit for Cosco Shipping Holdings as boxship rates fall.

Transpacific levels have endured a sharp decline, the analyst said.

Cosco and its new acquisition OOCL both have their largest market share in these trades.

Finance costs related to the OOCL takeover will also weight heavily this year, Jefferies added.

Costs hit CNY 952m ($140.77m) in the third quarter, from CNY 361m in 2017.

"We believe the high interest expense will be a drag on earnings as we estimate 2019 to be profitable at operating level but losses at net level," Jefferies said.

Cosco Shipping Holdings' third quarter net profit fell to CNY 821.8m.