CSP's 1Q20 shareholders' net profit was basically in line with ourexpectation. Because of the negative effect of COVID-19, CSP's 1Q20revenue decreased by 11.0% YoY to US$220.5 mn. CSP's shareholders' netprofit recorded an increase of 84.1% YoY to US$91.9 mn, representing EPS ofUS2.91 cents. Excluding the one-off impact of net gains from disposal ofterminals, adjusted shareholders' net profit was US$30.4 mn, down 39.1%YoY.
　　CSP's Greater China container throughput has shown recovery sinceMarch. Excluding throughput from Yangzhou Yuanyang, Zhangjiagang WinHanverky and Nanjing Longtan Terminals, CSP's container throughput inGreater China should record an increase of 0.7% YoY in March and adecrease of 1.3% YoY in April. However, given the global outbreak ofCOVID-19, CSP's container throughput from both Greater China and overseasis estimated to be suppressed in 2Q20.
　　Ports portfolio optimization continued and CSP's initiative in seizingfuture acquisition opportunities is expected to be enhanced by capitalrecycling. After the recent sale completion of CSP's interests in 3 terminals, inApril, CSP has agreed to sell its equity interest in Jiangsu YangtzePetrochemical Terminal. The deal is expected to catalyze profit and enhanceCSP's cash position for potential acquisition opportunities.
　　Reiterate "Accumulate" rating given attractive valuation and reliabledividend policy but revise down TP to HK$5.70 to reflect pessimism. Weexpect no massive coronavirus-led fundamental damage to CSP given itsstrong synergy with the Ocean Alliance and a sufficient cash position. Our TPrepresents 7.1x, 7.1x and 6.3x 2020-2022 PER.