Yangzijiang Shipbuilding (Holdings)

Management has updated that YZJ has clinched US$414 million order wins since 26 April 2013 bringing 1H 13 order wins to US$1.01 billion for 27 vessels. There are also 51 outstanding vessel construction contracts valued at US$2.64 billions for container and multi purpose dry bulk vessels. More info: http://infopub.sgx.com/Apps?A=COW_Corpor...update.pdf

YZJ also acquired the minority interest in the Changbo Yard for RMB 110 million - http://infopub.sgx.com/Apps?A=COW_Corpor...hangbo.pdf

In addition, there is an interesting article on one of YZJ rivals - http://www.reuters.com/article/2013/07/0...tor&rpc=43 - titled: China Rongsheng shares suspended after job loss reports.

Any thoughts on this ?

(Not Vested)

(04-07-2013, 05:38 PM)Nick Wrote: Management has updated that YZJ has clinched US$414 million order wins since 26 April 2013 bringing 1H 13 order wins to US$1.01 billion for 27 vessels. There are also 51 outstanding vessel construction contracts valued at US$2.64 billions for container and multi purpose dry bulk vessels. More info: http://infopub.sgx.com/Apps?A=COW_Corpor...update.pdf

YZJ also acquired the minority interest in the Changbo Yard for RMB 110 million - http://infopub.sgx.com/Apps?A=COW_Corpor...hangbo.pdf

In addition, there is an interesting article on one of YZJ rivals - http://www.reuters.com/article/2013/07/0...tor&rpc=43 - titled: China Rongsheng shares suspended after job loss reports.

Any thoughts on this ?

(Not Vested)

First of all, I assume we agree that shipping industrial will recover, the question is will the company survive till then.

Rongsheng seems not able to sustain, at least not in full shape. I am not familiar with the company, so will not comment further.

YZJ is facing the similar issues, reduced new ship orders, delay the delivery of existing orders, and even cancellation of orders. In FY2012, shipbuilding revenue down only 7.7% YoY. It showed the management has a working solution. Please refer to page 22 of AR2012 for the detail.

Investment segment helped to cushion the impact, and maintained the dividend payout more and less the same.

One of the issue of Rongsheng was debt, with its ST debt of 7 times the cash reserve (as in the article posted). In FY2012, YZJ's ST debt was 628 million RMB, while cash and ST investment was 2713 million RMB. Furthermore YZJ is in net cash position.

Comments are welcome...

(04-07-2013, 10:42 PM)CityFarmer Wrote:

(04-07-2013, 05:38 PM)Nick Wrote: Management has updated that YZJ has clinched US$414 million order wins since 26 April 2013 bringing 1H 13 order wins to US$1.01 billion for 27 vessels. There are also 51 outstanding vessel construction contracts valued at US$2.64 billions for container and multi purpose dry bulk vessels. More info: http://infopub.sgx.com/Apps?A=COW_Corpor...update.pdf

YZJ also acquired the minority interest in the Changbo Yard for RMB 110 million - http://infopub.sgx.com/Apps?A=COW_Corpor...hangbo.pdf

In addition, there is an interesting article on one of YZJ rivals - http://www.reuters.com/article/2013/07/0...tor&rpc=43 - titled: China Rongsheng shares suspended after job loss reports.

Any thoughts on this ?

(Not Vested)

First of all, I assume we agree that shipping industrial will recover, the question is will the company survive till then.

Rongsheng seems not able to sustain, at least not in full shape. I am not familiar with the company, so will not comment further.

YZJ is facing the similar issues, reduced new ship orders, delay the delivery of existing orders, and even cancellation of orders. In FY2012, shipbuilding revenue down only 7.7% YoY. It showed the management has a working solution. Please refer to page 22 of AR2012 for the detail.

Investment segment helped to cushion the impact, and maintained the dividend payout more and less the same.

One of the issue of Rongsheng was debt, with its ST debt of 7 times the cash reserve (as in the article posted). In FY2012, YZJ's ST debt was 628 million RMB, while cash and ST investment was 2713 million RMB. Furthermore YZJ is in net cash position.

Comments are welcome...

Rongsheng Talks With Chinese Cities to Seek Financial Aid

http://www.hellenicshippingnews.com/News...283d88e71f

But what really caught my attention is this short paragraph:

“We expect shipyard failures could become a reality in China if current conditions persist,” Barclays Plc analysts Jon Windham and Esme Pau wrote in a report to clients yesterday. “Those yards not facing such harsh financial difficulties could increase their market and pricing power.”

In another article, Hyundai Heavy is raising price for new builds of eco-friendly vessels
http://www.hellenicshippingnews.com/News...110a8701ba

While YZJ cannot compare with HHI, and their products range differs, it might relief some margin pressures.

YZJ most probably not going to face financial difficulties in the short term, even if some of the HTM needs to be impaired. As long as China dun allow the credit squeeze to blow in their face.

But, you dun need a life and death situation regarding the HTM, some consistent bad news in that front, will trigger bad price fall.

(Vested)

http://www.hellenicshippingnews.com/News...bb609ddbc2

Its shipbuilding business gets depleted.According to Maybank Kim Eng, Yangzijiang Shipbuilding is expected to maintain stable profitability at the gross level (~24-26% segment gross margins) for its shipbuilding business.
Maybank's forecast is for CNY707m (-20% YoY, -2% QoQ) in PATMI. YZJ will enter into its most trying times between 2H13 to 1H14 as its shipbuilding orderbook gets depleted.
Here's more:
YZJ has maintained its rationality in the shipbuilding business, refusing to take any orders that are loss-making. Instead of using aggressive pricing to secure jobs, it instead sought to counter the downturn through the micro-financing business and investments in held-to-maturity assets.
This did not go down entirely well with many investors but has kept the company afloat.
YZJ has one of the strongest balance sheets and has good track record for execution. It recently secured a batch of new orders worth USD414m, bringing YTD order wins to about USD1.01b. It still has 51 options worth USD2.64b outstanding.
Valuations are already at a low among the Chinese shipbuilders, and we do not see much downside from here even if the sector de-rates.
However sector weakness will mean that the stock price would continue to be range bound.
Source: Singapore Business

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Another window for accumulation if HTM impairment is negligible perhaps?
(Vested)

BDI on the rise since early june, technical breakout on YZJ, NOL and maybe the highly geared cosco.

http://www.hellenicshippingnews.com/News...c1bb93f303

Banks have tightened lending to Chinese shipyards, putting more pressure on an industry that is already suffering from sluggish demand and a supply glut, as Beijing tries to cut excess capacity across a range of sectors.
The financing squeeze is set to hit less established yards, but could strengthen bigger players such as Yangzijiang Shipbuilding Holdings (YAZG.SI) and South Korean rivals.

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Despite China Rongsheng's troubles, large and financially sound yards in China, as well as yards with a good track record outside China, are expected to benefit, analysts said.
"It depends on the conditions at your shipyard. Well-run companies don't have any problem," said Ren Yuanlin, chairman of Yangzijiang Shipbuilding, when asked if the company has facing tightening credit.
Singapore-listed Yangzijiang has won new orders worth $1 billion so far this year.

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Eagerly awaiting results.

Another news:
http://www.sinoshipnews.com/news_content...d=3w3c1638

Beijing to increase ship export tax rebate

(24-07-2013, 09:49 PM)Greenrookie Wrote: "It depends on the conditions at your shipyard. Well-run companies don't have any problem," said Ren Yuanlin, chairman of Yangzijiang Shipbuilding, when asked if the company has facing tightening credit.
Singapore-listed Yangzijiang has won new orders worth $1 billion so far this year.

Same singapore style management. Never answer the question.

Yangzijiang set to launch the first ever trading of shares in RMB on the SGX.

http://infopub.sgx.com/FileOpen/YZJ-Pres...eID=249130

Hmm.. an interesting step. I am still trying to figure out the implication...

Documentary on Yangziijiang in Mandarin.

http://v.youku.com/v_show/id_XMjU5MzQ3Nz...?f=4021653

Another order win,

from clarkson:

It was also reported this week that Peter Dohle have placed an order for two firm plus two option 64,000 DWT Ultramax at Yangzijiang.
Pricing is in the region USD 25.5 Mill with delivery planned from the end of 2015.

http://drg.blob.core.windows.net/helleni...9-7-13.pdf

YZJ now has orders to last till the end of 2015.

(Vested)