Yangzijiang

[millionairemind]

This ticker got halted...

Looking at the massive selling this morning, I guess its bad news.

[Aspellian]

could it be linked to its PPL acquisition from Baker?
note in my posting in baker tech - SCM ordered Baker to stop the sale of PPL to YZJ because of its legality but Baker says that there's no basis.

[millionairemind]

Results out..

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

[winston]

Yangzijiang Shipbuilding: 1Q10 results in line with expectations

Summary: Yangzijiang Shipbuilding (YZJ) reported a 28% YoY rise in revenue to RMB2.68b and a 21% increase in net profit to RMB586.4m in 1Q10, accounting for 21% and 25% of our full year estimates respectively.

The higher revenue was mainly due to increased productivity, resulting in the delivery of more vessels in 1Q10 (10 vessels vs. six in 1Q09). Gross profit margin also improved from 20.3% in 1Q09 and 19.7% in 4Q09 to 23.3% last quarter, mainly due to higher profit recognition for two high margin vessels.

YZJ has had no order cancellations to date and has also managed to secure seven shipbuilding contracts to build bulkers, contributing to an order book of US$5.45b (125 vessels).

We maintain our HOLD rating and fair value estimate of S$1.60 pending an analysts’ briefing later in the morning. (Low Pei Han)

Source: OCBC

[winston]

Yangzijiang plans to issue Taiwan depository receipts

SINGAPORE - Singapore-listed shipbuilder Yangzijiang said on Monday it plans to list Taiwan Depository Receipt of up to 100 million new ordinary shares.

The company said the additional funds raised will be used to help boost its war-chest to pursue potential acquisitions, strategic investments and to strengthen its working capital. -- REUTERS

[millionairemind]

Published June 18, 2010

Yangzijiang shareholders need more convincing

By LYNETTE KHOO

TWICE in a row, Yangzijiang Shipbuilding has ploughed money into businesses completely unrelated to its core business. First, it was a 60 million yuan (S$12.2 million) investment in a Chinese venture capital (VC) fund for a 20 per cent stake last week. Next, it has taken a 51 per cent equity stake in a microfinance company for 153 million yuan.

While the invested sums are said to be immaterial to the group's financials, one wonders why the shipbuilding company has embarked on such ventures and their accompanying risks. Shareholders seeking dividend yield may also wonder why the company is not raising the payout instead if it has so much spare cash.

Barely one week after its investment in VC fund Jiangsu Huagong Venture Capital Co (JHVCCO), Yangzijiang announced yesterday that it is subscribing for a 51 per cent stake in micro-lender Jiangsu Runyuan Rural Microfinance Co for 153 million yuan. The latest investment represents about 2.4 per cent of the group's audited net tangible assets as at Dec 31, 2009.

Yangzijiang had earlier in July last year paid 100 million yuan for a 20 per cent stake in another VC fund Everbright Venture Capital Jiangyin Co (EVCJCO).

Explaining the rationale yesterday, Yangzijiang said that the investment in micro-lender Runyuan is 'part of the group's asset management activities'. Together with earlier investments in two VC funds, they 'are expected to enhance the return of the group's assets and shareholders' value'.

The latest investments are not expected to have a significant impact on the earnings per share and net tangible assets per share of the group for the current year. But they are not small. Together with the investment last year, they added up to a total of 313 million yuan, or S$63.7 million.

Hence, there needs to be more clarity on these investment decisions and the risks involved, given the long gestation period of venture capital funds and the slim chance of returns in the near term.

The latest investment in Runyuan will also make the latter a subsidiary of Yangzijiang. It is hence baffling why a shipbuilding company should venture into rural-lending, a relatively low-margin and low-return business.

Perhaps, the group should provide a clearer picture on the track record of such ventures and the kind of returns that they have been churning out.

In particular, its investment in Runyuan requires greater justification since it is a newly incorporated company and it is unclear if it has a track record to speak of. Runyuan is managed by the son of Yangzijiang's chairman, making the investment an interested party transaction.

Ren Letian has subscribed for 15 per cent equity stake in Runyuan and is acting as managing director of the company. Given the connection between Mr Ren and Yangzijiang's chairman Ren Yuanlin, more is needed to convince shareholders on the merits of this investment choice on a commercial basis.

Of course, another way to look at these developments is that such investments may suggest good corporate citizenry - the two VC funds provide seed money to budding enterprises in their respective provinces and the micro-lender helps the cash-strapped that no banks would lend to. And while doing good, there is also a chance of reaping some long-term financial rewards from these investments.

But this aside, the group needs to spell out its investment objectives clearly to explain how such investments will enhance the return of the group's assets and of shareholders' value.

Being the most profitable S-chip with a strong cash hoard of 5.12 billion yuan as at March 31, Yangzijiang obviously has lots of gunpowder left to deploy. It is among the few S-chips that issue dividends, having raised its final dividend per share from 2.8 cents in fiscal 2008 to 3.5 cents in 2009.

Issuing dividends more frequently (it did not issue dividends in the first quarter) could perhaps instill greater confidence in the stock than putting money into ventures that pose unknown risks with no certainty of returns.

As it seems, Yangzijiang needs to do more to convince shareholders on how it is making good of its cash through its entry into seed-funding and microfinance activities.

[millionairemind]

Published June 22, 2010

Yangzijiang, Qatar fund seal share placement deal

YANGZIJIANG Shipbuilding (Holdings) Ltd has secured an undertaking by a Qatari state investment fund to proceed with an investment in the company.

The Chinese shipbuilder, listed on the Singapore Exchange, said yesterday it has entered into a deed of amendment and restatement with QD Asia Pacific Ltd. Under this, QD Asia has agreed to proceed with its subscription of shares in Yangzijiang notwithstanding the outcome of the PPL Holdings acquisition. This is provided that the other conditions for the completion of the placement are satisfied on or before Oct 27, 2010.

The proposed placement of 83.55 million new shares at the issue price of $1.295 each is worth about $108 million. Yangzijiang had in April announced it was teaming up with the Qatari fund to acquire PPL Holdings for US$155 million, which will see Yangzijiang ending up with a 50.1 per cent stake. But this proposed acquisition has been stalled since it sparked a battle over the 15 per cent stake in PPL Shipyard held by PPL Holdings.

Sembcorp Marine, which owns the other 85 per cent of PPL Shipyard, objected to the sale, citing its 'pre-emption rights' to buy the other 15 per cent stake, and has initiated court action to claim ownership.

QD Asia is a wholly-owned subsidiary of Qatari Diar Real Estate Investment Company, one of the sovereign wealth funds of the state of Qatar, said Yangzijiang. Upon the completion of the share placement, QD Asia will own 2.235 per cent of the enlarged share capital of Yangzijiang.

The Qatari investment will serve as 'an excellent platform' for Yangzijiang to extend its reach into Middle East region by tapping into Qatari Diar's network, said Ren Yuanlin, executive chairman of Yangzijiang.

The net proceeds will be used for potential merger and acquisition opportunities in the shipbuilding and marine offshore industries. 'Recently, we invested in several projects to widen our investment portfolio and also, as part of our efficient cash redeployment scheme. These investments are capped at a small percentage of our cash resources, and the majority is reserved for working capital and M&A opportunities in our core shipbuilding and related fields, to build long term sustainable shareholders value,' said Mr Ren.

Yangzijiang's core business is the building of commercial vessels ranging from containerships, bulk cargo carriers and multi-purpose cargo vessels. The group owns two shipbuilding bases across the Yangtze River, across each other.

Yangzijiang's shares closed 4 cents higher yesterday at $1.35.

[millionairemind]

June 28, 2010, 6.35 pm (Singapore time)

Yangzijiang to invest RMB156 mln in China yard

By ANGELA TAN

Yangzijiang Shipbuilding (Holdings) Limited has on Monday bought a 51 per cent interest in Jiangsu Changbo Shipyard Co., Ltd (JCSC) for RMB51 million.

As part of the deal, Yangzijiang will inject RMB105.1 million into JCSC to increase its capital reserves.

The total investment is estimated at RMB156.1 million.

JCSC has an outstanding shipbuilding order book worth US$338 million comprising 20 vessels that are contracted to be delivered between the second half of 2010 and mid of 2012.

[winston]

Yangzijiang Shipbuilding: Able to capitalize on opportunities

Summary: As at 31 Mar, Yangzijiang Shipbuilding (YZJ) had about RMB7.8b in cash (includes RMB2.6b restricted cash). The group is keen to expand its business and offerings to customers, and is likely to be on the lookout for opportunities to pick up distressed assets, especially since management has expressed interest in developing offshore as well as scrapping businesses.

YZJ focuses on bulk carriers and containerships, and demand for new bulk carriers worldwide has been encouraging. Cosco and JES International have also announced 15 and 8 new bulk carrier orders respectively in the past two months.

With an outstanding order book of US$5.45b as at 28 Apr 2010 and an enviable financial position, we maintain our BUY rating on YZJ with fair value estimate of S$1.60. (Low Pei Han)


Source: OCBC

[winston]

Yangzijiang secures US$234.16 mln in deals in Apr-Jun By ANGELA TAN

Yangzijiang Shipbuilding (Holdings) Ltd said it has secured shipbuilding contracts for 10 vessels worth US$ 234.16 million from April 1, 2010 to June 30, 2010.

The shipyard said the vessels are to be delivered before July 2012, and therefore, will not have any significant impact on its earnings for the financial year ending December 31, 2010.


Source: Business Times