Financial Analysis Of China COSCO Holdings Company Limited And China Shipping Container Lines Company Limited

In recent years, with deep influence of financial crisis, the global trading development becomes slow down, shipping business in our country facing unprecedented predicament.Being the most representatives in China, China COSCO and China Shipping Container Lines Company have their own business of bulk cargo transportation and container liner transportation respectively. This article analyze the two companies from macro-environment, industry field, financial policy step by step, mostly focus on three-dimensional analysis, comparison of each financial index, ROE disassemble and strategy matrix analysis, then make comments of the operation policy and feasible suggestions for the future development of the two companies.At the beginning of2008, financial tsunami had worldwide outbreak, together with the European debt crisis, which make the world economics severe slowdown, global trading decline sharply. Meanwhile, shipping business is facing hundred year impact, lots of vessels and ports are out of business, ship owners aren’t meet their ends. Shipping business had their bargain ability been weaken by related upstream and downstream firms, the profits becomefurther dilution.Inside the enterprise, the China COSCO’s profitability is better thanChina Shipping Container Lines Company Limited, when it comes to efficiency of assets, China Shipping is better. High debt makes China COSCO undertake big financial crisis, but China Shipping keep their debt ratio in a moderation range from beginning to end. Unfortunately, with the loss year by year, the two companies have very bad cash creation ability, both of them belong to loss value enterprise.During the research period, China COSCO had their quality of profit better than China Shipping, but in the future, China Shipping would be more competitiveness than China COSCO in cash creation ability.Although these two companies are loss their value, they still occupy money from related upstream and downstream companies. Even though China COSCObeen rated as loss king, but its ROE average higher than China Shipping. But in2012, compared with China COSCO, China Shipping restarts to make profit, so China Shipping will have bigger room for improve ROE and less risks.Even though the shipping market still low, China Shipping makes people see opportunities. It still worth our expectation to find out China COSCO will keep loss and retreat from stock market or start making profits in2013. When crisis coming, enterprise have to make relevant policy for survival, and reserve enough capital for the next spring. China COSCO just like a sleeping elephant, China Shipping like a running horse, nobody can tell who will dominate shipping market in the future.