Yangzijiang

[winston]

*DJ Yangzijiang Target Raised To S$1.68 From S$1.54 By CIMB


Source: Dow Jones Newswire

[winston]

YANGZIJIANG SHIPBUILDING - Yangzijiang said it expects to raise about S$153 million via issuing Taiwan depository receipts at NT$18.80 each, or about S$1.585 a share.


Source: Reuters

[winston]

DJ MARKET TALK: Nomura Ups Yangzijiang To Buy; S$1.94 Target

0055 GMT [Dow Jones] STOCK CALL: Nomura upgrades Yangzijiang (BS6.SG) to Buy from Reduce. Expects more positive newsflow this year, following US$915 million worth of orders unveiled earlier this week; "as the market leader in containerships in China, we believe YZJ is well-positioned to ride the imminent pick-up in containership orders in 2H10."

Says a key highlight of YZJ's operational performance is its ability to secure orderbook amid 2008-2009 financial crisis. Lifts target price to S$1.94 from S$0.75, implying 12.7X FY11 P/E, based on ROE-based valuation vs discounted cashflow basis previously. Shares end flat at S$1.60 yesterday.

Source: Dow Jones Newswire

[winston]

Yangzijiang TDRs jump on Taipei trading debut

TAIPEI, Sept 8 (Reuters) - The Taiwan depository receipts of Yangzijiang <911609.TW>, China's No.4 shipbuilder, opened at T$20.10 ($0.629) on their debut on Wednesday, 6.9 percent above their offer price.


Source: Reuters

[millionairemind]

September 8, 2010, 11.16 am (Singapore time)

Yangzijiang TDRs jump on Taipei trading debut

TAIPEI - The Taiwan depository receipts of Yangzijiang, China's No 4 shipbuilder, rose by the daily limit on their debut on Wednesday, raising some T$4.8 billion (US$151 million) for the company.

The TDRs opened at T$20.10, 6.9 per cent above their offer price of T$18.80, with a surfeit of buy orders.

Singapore-listed Yangzijiang had issued 240 million TDRs, becoming the first mainland Chinese firm to list in Taiwan as relations between the two former political foes warm and trade links expand.

Every two TDRs represent one share, and the company had originally estimated it would raise S$153 million (US$113.5 million).

The company said in August it had won 28 shipbuilding contracts worth US$915 million and analysts said its fundamentals looked sound.

'The worst for the global shipbuilding industry is over.

Yangzijiang's capacity has been booked through 2012,' said Teresa Huang, a fund manager at Shin Kong Financial's fund arm.

'We expect its TDRs to rally to T$25 in short term, about a 30 per cent upside potential from its listing price.'

Yangzijiang's Singapore shares slipped 0.6 per cent in early trade. -- REUTERS

[kennynah]

our resident reporter never go interview the chairman on this happy occasion ah ?

[winston]

Not vested.

This one has been on fire. What are the risks ? Rising Steel prices ? Rising Wages ? Low USD ? Cancellation of orders ?

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Singapore-listed Chinese shipbuilding firm Yangzijiang may be in focus after it said its third quarter net profit rose 32 percent to 730.4 million yuan ($110 million) from 554.2 million yuan a year ago.

Its revenue climbed 19 percent to 3.08 billion yuan as it delivered double the number of vessels in the July-September period versus a year earlier.


Source: Reuters

[kiasiDBT]

From CIMB:

Company update - Preferred Chinese yard - by Lim Siew Khee

• Maintain Outperform with higher target price of S$2.57 (from S$2.15). YZJ had secured US$1.3bn worth of orders in 3Q10 with pockets of orders in 4Q10. We believe the strength in containership orders could make up for softer demand for bulk carriers in 2011.

As such, we upgrade our order assumption from US$800m to US$1bn for 2011 and our FY11-12 earnings estimates by 3%. Our higher target price takes into account our earnings upgrade and a higher P/E of 14x (from 11x, its average since listing), now set in line with the average for Chinese peers in view ofthe revival in the containership sector. Stock catalysts could include stronger-thanexpected order wins and margins, in our view.

• Containership orders could return to 2007 peak. The container sector’s order book to fleet ratio of 13% is much lower than its 4-year average of 20%. There are only 277 containerships scheduled for delivery in 2011, adding 6% to the global fleet.

If more cash-rich owners are indeed out on a newbuild spree and assuming orders match the 2006/2007 order peak, the supply-demand balance by end-2011 could still be favourable with an estimated order book ratio of 15%.

• Top privately-held Chinese yard by container orders. Excluding state-owned yards, YZJ ranks first in terms of contract wins with about US$150m worth of containership orders YTD. Given this leading position, we believe YZJ should benefit from any further uptick in the containership sector.

Revival of containerships

Can orders return to 2007 peak?

A spike in containership newbuilding occurred in 3Q10 with 62 vessels ordered globally. Low 4Q10 orders (35 units) may be caused by seasonality, and we believe in an order resurgence from the containership sector in 2011, potentially back to 2007 levels on the back of:

1) strong utilisation rates;
2) disciplined addition of new capacity in recent years; and
3) ship owners’ cash-rich positions.

Global order book to fleet ratio on the way down.

The container sector’s order book to fleet ratio of 13% is much lower than its 4-year average of 20% due to the newbuild order drought since 4Q08. There are only 277 containerships scheduled for delivery in 2011, adding 6% to the global fleet capacity.

This is so much lower than the bulk carrier sector’s 1,353 vessels up for delivery in 2011 with an order book to fleet ratio of 38%. If more cash-rich owners are indeed out on a newbuild spree and assuming orders match 2007 levels (about 500 units), the supply-demand balance by end-2011 could still be favourable with an estimated order book ratio of 15%.

Ranks first among privately-held Chinese yards.

The crisis may have booted out smaller shipyards from the industry, leaving state-owned and quality private yards behind. YZJ ranks first among Chinese private yards in terms of contract wins, securing
10,184 TEU of new containership orders or about US$150m YTD. Given this leading position, we believe it should benefit from any further uptick in the containership sector.

Upgrade in order-win assumptions.

YZJ had secured about US$1.3bn worth oforders in 3Q10 with pockets of orders in 4Q10. Given an expected strength in containership orders in 2011, we upgrade our order assumption from US$800m to US$1bn for 2011 and our FY11-12 earnings estimates by 3%. We keep our FY12 orderassumption of US$1.2bn intact.

Moving up the value chain

Win-win partnership with CSBC. We believe YZJ’s dual listing in Taiwan as well as its impeccable track record in the shipbuilding industry has made it the preferred yard for Taiwanese shipbuilder, CSCB, in the latter’s first-ever partnership with a Chinese shipbuilder.

CSBC has the strength in shipbuilding design and technology while YZJ’s production capacity is twice that of CSBC’s total production capacity from yards in Keelung and Kaohsiung. We believe further collaboration is on the way between the two.

CSCB is considering diverting part of its shipbuilding process to the mainland in view of the lower labour costs there (one-third of Taiwan’s) while YZJ is moving up the value chain hoping to secure orders for larger containerships (above 4,500 TEUs).

Riding consolidation wave in China.

Recently, China Shipbuilding Economy Research, an affiliate of state-owned China State Shipbuilding Corp, declared that the Chinese shipbuilding industry will encounter a wave of consolidation with more M&As over the next few years, eliminating 30% of the existing players.

With YZJ’s strong balance sheet, we expect more M&As as YZJ can take on several smaller yards to expand its capacity. This year alone, it has been building up capacity and capabilities through joint ventures and M&As and the acquisition of new land in preparation for more order wins and larger vessel wins.

Valuation and recommendation

Expect upgrades in consensus estimates.

YZJ is our preferred Chinese shipbuilder for its quality execution and strong financials. FY11-12 consensus estimates appear too low and a blanket upgrade by the Street is very possible as the market could have underestimated YZJ’s profit margins and revenue recognition.

Maintain Outperform with higher target price of S$2.57 (from S$2.15), now based on 14x (from 11x, average since listing) CY12 P/E, in line with the average for Chinese peers. Stock catalysts could include stronger-than-expected order wins and margins, in our view.

[kiasiDBT]

From OCBC Sec:

Yangzijiang Shipbuilding: JV company for marine electrical systems

Yangzijiang Shipbuilding (YZJ) announced that its subsidiary has entered into an agreement with four other companies to establish a joint venture company (YZJ to invest 20% of the RMB100m registered paid-up capital) that will provide marine electrical systems for shipbuilding of commercial vessels and marine engineering projects.

The JV will develop, produce and sell marine electronic products, besides providing technical consultation
and services to the marine industry.

Huge emphasis will be placed on research and development. The other four companies are Beijing Highlander
Digital Technology (listed company that is a specialist in marine electronics technology), Jiangsu Hantong Ship Heavy Industry (shipbuilding enterprise), Taizhou Sanfu Ship Engineering (shipbuilding enterprise) and Jiangsu Yichun Group (owns shipyards).

We are positive on this latest development as YZJ is likely to have an edge over competitors should this JV be successful in providing high quality marine electrical systems to customers. The JV may also enable YZJ to tap on Highlander's clientele.

Finally, this may also provide an alternative source of income from marine electrical systems, though we put off adjusting our earnings estimates as we will be obtaining more details from management.

Maintain BUY with fair value estimate of S$2.36 for now. (Low Pei Han)

[winston]

Not vested

YANGZIJIANG SHIPBUILDING - Singapore-listed Chinese shipyard Yangzijiang Shipbuilding said on Tuesday its fourth quarter net profit rose 30 percent year-on-year to 838.1 million yuan (127.6 million).

The firm said it secured 50 new vessel orders worth $1.38 billion in 2010.


Source: Reuters