The Company's 3Q19 revenue was US$254.7 mn, up 0.7% YoY, in linewith our expectation. Due to the increase in cost of sales, gross profit marginnarrowed 3.8 ppt YoY in 3Q19. In addition, shareholders' profit was down 4.4%YoY to US$71.8 mn, slightly missing our expectation. In 1-3Q19, the adjustedprofit to shareholders increased 5.4%YoY. Backed by rapid overseas growthand OCEAN Alliance-related throughput, total throughput increased by 4.9%YoY during Jan.-Oct. 2019. Throughput of oversea terminals continued toperform better than that of the greater China region. CSP's globalisationstrategy has been proven to better serve the demands of its parent companyand Ocean Alliance.
　　The Company's capacity expanded with acquisitions and newtechnology introduced, and integration continues to improve terminalefficiency. The acquired TPCH is CSP's first controlling stake in aterminal-related company in the South America area which and will provide 1mn TEUs in capacity in phase one. In addition, the Navis N4 system, whichhas been successfully applied in CSP's Zeebrugge terminal, is expected toenhance efficiency. On the other hand, CSP's agreements to sell threeterminals in China showed intention to streamline its ports portfolio whichaligns with CSP's long-term strategy. The merger of Tianjin terminals hashelped improve efficiency.
　　Maintain "Accumulate" rating and revise down TP to HK$7.90. In thecurrent stage, the trade tension between China and U.S. remains anuncertainty to sway market sentiment, but we think that the globalizationstrategy with support from the OCEAN Alliance makes CSP's 2019 equitythroughput target highly achievable. Our new TP represents 8.1x, 8.1x and7.5x 2019-2021 PER.