Yangzijiang

[winston]

YANGZIJIANG SHIPBUILDING HOLDINGS - Chinese shipbuilder Yangzijiang Shipbuilding Holding announced its first quarter profit rose 30 percent to 483.3 million yuan ($70.81 million). [ID:nSN4T50982]

Credit Suisse upgraded Yangzijiang Shipbuilding to "outperform" from "neutral" and raised its target price to S$0.60 from S$0.40, citing the restructuring of the shipping industry in China

[winston]

From Kim Eng:-

Yangzijiang turned in a 30 per cent rise in first-quarter net profit to 483.3 million yuan (S$106.3 million) on a 23 per cent rise in revenue to 2.09 billion yuan, despite the tough times in the shipbuilding industry. Yangzijiang kept its gross profit margin above 20 per cent, despite taking an 8 per cent provision, compared with a provision of just 0.5 per cent in the previous corresponding quarter. The higher provision was taken to cover potential variations to contract prices for vessels under construction, higher raw material costs and a weakening US dollar/yuan rate.

The increased provision was offset by the higher profit margins from construction of larger vessels at the group's new yard, Yangzijiang said. Operating costs were kept under control, though the cost of sales rose to 1.67 billion yuan from 1.34 billion yuan previously due to an increase in turnover and construction activity. The effective tax rate fell from 7.2 per cent in Q1 2008 to 5.7 per cent in Q1 2009, as more contributions came from the new yard, which is tax-exempt.

(Sources: Company, SGX, Business Times, Dow Jones)

[winston]

Ha Ha ... follow the recommendations at your own risk..

DJ MARKET TALK: Macquarie Raises Yangzijiang Target To S$0.38

0258 GMT [Dow Jones] STOCK CALL: Macquarie raises Yangzijiang Shipbuilding (BS6.SG) target price to S$0.38 from S$0.28, maintains Underperform rating. Raises earnings forecasts on back of improved margins due to larger vessels under construction this year; revises up FY09 earnings forecast by 23%.

Says China-based shipbuilder's profitability holding up fairly well vs Chinese peers, thinks key driver is rise in vessel size which brings benefits of increased scale. But remains cautious on stock as says order revisions, cancellations may start hitting earnings in FY10, recent rebound overdone; "we believe the recent rally of the shipbuilding company shares is not supported by a fundamental recovery of the industry."

Shares +0.7% at S$0.745.

[Aspellian]

Yangzijiang Shipbuilding (Holdings), one of China’s leading shipbuilders says it achieved all-time high half yearly earnings of RMB1.1 billion ($231 million).

Turnover for 1H2009 for the group increased by 32% to RMB4.6 billion with the progressive rise in the new yard’s productivity. Eleven vessels were delivered in 2Q2009 and total of 17 were delivered in 1H2009.

On a quarterly basis, 2Q revenue rose 41% y-o-y to RMB2.5 billion while net profit shot up 80% y-o-y to RMB 607 million.

Yangzijiang said gross profit for the group surged 57% to RMB1.0 billion in 1H2009 mainly due to higher profit recognition for higher margin vessels delivered in the period.

Other income that comprises mainly of interest income increased by 24% to RMB92.0 million in 1H2009 as a result of better cash position in 2Q2009 as compared to last year.

The group kept the costs under check and the operating expenses remained stable at 2% of the revenue. The effective tax rate for the Group increased from 5.3% in 1Q2009 to 11.1% for 1H2009 mainly due to the full provision of 5% withholding tax over the earnings of both the yards according to the relevant regulations in China.

Consequently, the net profit attributable to shareholders increased by 54% in 1H2009 to RMB1.1 billion.

With healthy level of profit generated and group’s de-stocking policy (in view of weakening commodity prices), the net cash generated from operating activities remained robust at RMB610 million for 2Q2009 and RMB1.1 billion for 1H2009, said the shipyard.

This helped the cash and cash equivalents to bulge up to RMB5.8 billion with the group maintaining a net cash position in terms of gearing, it added.


Yangzijiang Shipbuilding Holdings (YZJ SP), a China- based shipbuilder, climbed 3.4% to 92.5 cents. The company said profit in the second quarter climbed 80% to 607.4 million yuan ($127 million).

[Aspellian]

I am puzzled as to how YZJ is able to deliver such results in current economic conditions. the management really so good?? pardon me for my skeptiscm.

anyway yesterday was looking at YZJ - NAR - YZJ price went up and maintained at $0.925 despite market down by >50pts. showing resilient and support. today price went up and hit $1.00.
Interesting to see if it crosses psychological point of $1.00 convincingly and on high volume.
if story plot goes accordingly to plan, you will see analysts scrambling to upgrade their price targets.

[kennynah]

GE cooked their books.... and so.... who knows...

[Aspellian]

YZJ rose nearly 8% on huge huge volume in a lacksture market.
YZJ breached $1.00 mark convincingly.
If market cheong on one of the coming days, YZJ supposedly will fly.
Why YZJ cheong? market is very surprised by its much better results. Growth aka fundamentals still drive share price (haha, who don't know!!)
But share price will cheong only in uptrend (bullishness).

QN: or is YZJ stock in distribution (high vol)? how to see whether someone is selling? I remembered reading somewhere that if share price closed at low of day or no movement but on very very high volume, then its covered distribution? right?

QN: anyone here will like to argue why not to buy YZJ? any potential red flags?

<not vested. only an observor>

[kennynah]

QN: or is YZJ stock in distribution (high vol)? how to see whether someone is selling? I remembered reading somewhere that if share price closed at low of day or no movement but on very very high volume, then its covered distribution? right?

you might get a clue if you are able to actually scrutinize the buy/sale transactions ... the consolidated volume cannot give an accurate picture...

[winston]

QN: or is YZJ stock in distribution (high vol)? how to see whether someone is selling? I remembered reading somewhere that if share price closed at low of day or no movement but on very very high volume, then its covered distribution? right?

You can see the SGX website on any insiders selling.

Yes, if price does not move on high volume, someone is distributing. However, the smart BB normally sell on the way down, not while when it's still strong.

QN: anyone here will like to argue why not to buy YZJ? any potential red flags?

Do you see ship-building to be doing well or not ? Where do u see US$ heading ( all contracts in US$ ), Steel prices heading , Order Cancellation and global trade ?

[Aspellian]

You can see the SGX website on any insiders selling.

Yes, if price does not move on high volume, someone is distributing. However, the smart BB normally sell on the way down, not while when it's still strong.

ic. noted "selling on the way down". usually SGX website quite delayed.

Do you see ship-building to be doing well or not ? Where do u see US$ heading ( all contracts in US$ ), Steel prices heading , Order Cancellation and global trade ?

interesting observation. true that all these are potential red flags but may or may not affect in the short term.
YZJ seems to be handling the cancellation well, wonder how they do it?
or is YZJ a gem out of all the others? hmmm... but of cos one is taking on more risk to buy even though there are warning signs.