Yangzijiang Shipbuilding (Holdings)

I was thinking. They diversify into properties, financing and rig building due to cyclical nature of ship building. Now they are backtracking their decision citing focusing on core ship building activities. In addition, I read an article which mention Mr Ren refuse to accept more orders for oil rigs after they manage to clinch their first oil rig project. Any comments from vested buddies on their actions?

Recently vested.

Some history as below:
- Baker sold their 100% stake of PPLH (final price of 116.25mil USD), whom in turn hold 15% stake of PPL shipyard to a consortium with YZJ eventually taking up ~45% of the stake, which translates to YZJ paying 52.3mil USD (http://yangzijiang-cn.listedcompany.com/...3557.1.pdf)

- SCM was wary of having rig building technology (the popular Pacific Class) falling into Chinese hands at the time of the peak rig building cycle in 2010, where Chinese yards were starting to poach Sporean talent and undercutting in terms of bid prices. It went to court demanding that that it should buy over the 15% stake of PPL shipyard for just 59mil USD, about 50% of what the consortium paid. They eventually lost. Baker recognized their gains and paid out a special dividend, while SCM had to start "sleeping with a competitor now" (http://infopub.sgx.com/FileOpen/Ann_Judg...leID=79572).

As of today:
- I am not sure if PPLH's only assets is the 15% of PPL shipyard. But fast forward to today, I would imagine that by selling away the 15% stake, PPLH is an empty shell with no more tangible assets besides the cash it receives from the sales.

- Compared with purchase price of 116.25mil vs 115mil USD, excluding the effects of FOREX, YZJ does not have a capital gain (for its 45% stake), as mentioned by forummer desmondxyz. Its monetary gains are restricted to the ~30mil USD of dividends declared, as mentioned by CityFarmer.

My thoughts:
- For the same price that YZJ and co paid, SCM is finally able to stop having to "sleep with the enemy" now. Could it be a little too late or a brilliant move when we look back in future? (just like when Keppel FELS was privatized by its parent)..I guess only time will tell.

- As for YZJ, focusing on their core competencies may not be a bad move. As the saying goes, when the fact changes, one changes their mind...especially this looks like both a win-win situation for both parties (One wants to buy, another wants to sell)

Hi all,

Actually I can't understand this from Sembmarine angle.

Given YZJ has only 15% stake, can they actually affect any decision making at all? Most prob will be out voted at the board right? So why buy back now ?

If it's worry about technology fallen to Chinese companies, wouldn't it already?

I can understand the rationale to sell but not buy

(24-08-2016, 10:06 AM)Bibi Wrote: I was thinking. They diversify into properties, financing and rig building due to cyclical nature of ship building. Now they are backtracking their decision citing focusing on core ship building activities. In addition, I read an article which mention Mr Ren refuse to accept more orders for oil rigs after they manage to clinch their first oil rig project. Any comments from vested buddies on their actions?

Recently vested.

This is something which I cannot really understand too. The rig building part is the easier part, YZJ actually "won another close to 1 billion" rig contract (read earlier tread) but the deal did not carry in because the customer did not pay the deposit. IIRC YZJ is asking for. 10-20 % deposit when others will settle for 5%

I wonder why they exit their property development business. Since quite a fair bit of colleteral of HTM is property. I thought there is some synergy involved. 

My speculation is YZJ need some firepower to do M&A because of govt arm twisting to help in the consolidation and restructuring of the shipbuilding industry 

(Vested)

Does anyone know if PPL shipyard financial statements is available somewhere?

Yangzijiang Shipbuilding to slash 10% more jobs this year
26 Aug 2016 15:09
By Tan Hwee Hwee

CHINA'S Yangzijiang Shipbuilding Group is looking to slash 2,000 more jobs in a bid to further reduce costs as its order intake for shipbuilding slows.

A Yangzijiang Shipbuilding spokesman confirmed to The Business Times on Friday the company plans to cut 10 per cent of its current workforce, equivalent to 2,000 jobs, this year.

The shipbuilder cut 4,000 jobs earlier this year, bringing its workforce to 22,000. Those job cuts contributed to a reduction in the group's Q2 shipbuilding cost to 1.38 billion yuan (S$280 million), compared with 3.2 billion yuan last year.
...
Source: Business Times Breaking News

China's Largest Private Shipbuilder to Cut 2,000 Jobs in 2016
http://english.caixin.com/2016-08-26/100982280.html

Yangzijiang jialat Liao lah. Shipping market bad, OnG also bad, wanna buy wait for 40c maybe can consider

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http://splash247.com/yangzijiang-shipbui...s-company/

Cutting jobs, selling marine system after PPL, busy raising capital? Acquisition in the cards or just active management?

Small win ( no need to announce thro sgx) better than no win. 

http://splash247.com/jiangsu-ocean-shipp...pbuilding/