Yangzijiang

[millionairemind]

Yangzijiang Shipbuilding will also be eyed after the Chinese firm said its third-quarter net profit rose 17 percent from a year earlier, helped by strong ship orders.

Every ship yard I have read up on says their customers are canceling orders... strange that YZJ is the only one flowing upstream..

[Aspellian]

Hi Winston (or any of the guys who are familiar with Chinese market),

Is it possible that YZJ is a preferred shipyard and "taken care" and nurtured by the Chinese govt? (this is a rumour i heard on the reason why YZJ has no ship cancellations)

[winston]

Hi A,

I dont know the Shipping industry that well. Most of the big SOEs are taken care by Ah Gong

Tak care,
Winston

[winston]

DJ MARKET TALK: Yangzijiang +0.5%; 3Q09 Net Profit +16.6% Y/Y

0422 GMT [Dow Jones] Yangzijiang (BS6.SG) +0.5% at S$0.99, supported by China-based shipbuilder's improved 3Q09 results. Net profit +16.6% on-year at CNY554.2 million as revenue +28.0% at CNY2.59 billion, although gross margins lower at 20.2% vs 23.0% due to sales of higher-margin vessels year earlier, higher operating costs.

"The results were slightly above expectations, although increasingly I think margins will go down because the newbuilds are at lower-margin prices. Other than that, cancellation risks remain low," says CIMB analyst Lim Siew Khee.

In bid to diversify revenue stream, Yangzijiang teaming up with several partners to set up new company to handle scrap steel processing to complement core building business. New business expected to begin in 1H10.

"It's supposed to be a profitable business, with margins at about 20 percent. This should help them counter the lull in shipbuilding," Lim says. Orderbook quotes suggest stock unlikely to test 52-week high of S$1.07.

Source: Dow Jones Newswire

[millionairemind]

This ticker being added to MSCI SG Index... up 7%

[LenaHuat]

I see. It's the local Ah Gong

[winston]

Not vested. From DBS:-

Yangzijiang has entered into an agreement with several strategic partners to acquire a ship breaking company for US$9m. This is Yangzijiang's second investment in ship breaking business to compliment its existing shipbuilding business.

This should provide additional source of income to Yangziijang and serve as natural hedge to its shipbuilding
business. The two ship breaking investments could contribute to about 5% to Yangzijiang's FY11's bottomline
in best scenario, assuming they obtain licences and fully ramp up by end of 2010.

Maintain Buy, TP: S$1.36.

[winston]

DJ MARKET TALK:Yangzijiang May Outperform; 4Q Results Good - OCBC

0053 GMT [Dow Jones] Yangzijiang Shipbuilding (BS6.SG) may outperform on solid earnings results - 4Q09 net profit +63% on year to CNY645.1 million, revenues +84% on year to CNY3.44 billion, driven by higher number of ships under construction and delivered.

Company says total order book stood at 127 vessels with value of US$5.6 billion as at end-2009; "the group does not expect any cancellation in respect of its existing contracts." OCBC Investment Research says FY09 net profit (+45% on year to CNY2.29 billion) was solid at 108% of broker's own estimates; "this set of results is laudable amidst a challenging environment."

Adds "Yangzijiang has been delivering consistently better performance year after year with relatively few negative surprises compared to peers, illustrating its good execution ability and management control."

Maintains Buy rating, puts S$1.28 target price under review. Shares end +3.9% at S$1.07 yesterday; pre-open quotes indicate buying interest up to S$1.10.

Source: Dow Jones Newswire

[millionairemind]

Looking at the results, I am still scratching my head.

How did YZJ get so far ahead of its competitors? If it can achieve this, Y did Cosco'S results fall so badly?

[winston]

*DJ Yangzijiang Target Raised To S$1.50 From S$0.74 By DB