Yangzijiang Shipbuilding (Holdings)

DBSV: A series of investments

http://www.remisiers.org/cms_images/rese...y_DBSV.pdf

More info about their latest 3 deals.

(Not Vested)

2 sets of pretty interesting articles on YZJ from Nextinsight.

http://www.nextinsight.net/index.php/sto...tion-plans

http://www.nextinsight.net/index.php/sto...ts-now-say

Its share price has taken a beating recently. The key question is what will happen post 2012 when all of its high margin pre crisis contracts are completed ? Will they opt for volume or diversification or both ???

Yangzijiang: US$2.1b contract win to build 22 containerships (ESHIPTRADING)

Jason Saw (6232 3871, jason.saw@dmgaps.com.sg)

The news. News reports that Seaspan has given a Letter of Intent (LOI) to Yangzijiang (YZJ) for a US$2.1b order for 22 containerships. The order is structured in a 6+6+5+5 deal and the official signing of the contract is expected to take place in late April of early May 2011. The new 10,000TEU containerships will cost ~US$98m each and will be 30% more fuel efficient than current designs. The first ship is expected to be ready in Jan 2014.

Our thoughts: The order size is higher than market expectation of 10 containerships and share price is likely to react positively to the massive news. YZJ has US$5.3b order book as of 31 Dec 2010 and assuming the first six vessels are confirmed, total order book could be boosted by US$588m or 11%. Given that the first vessel will be delivered in 2014, there is no impact on FY11 numbers. We believe YZJ is one of the few Chinese yards with the capability to build 10,00TEU containerships. We maintain our FY11-12F EPS forecasts which assumed US42.5b new orders in FY11 and billed in 2011/12. Maintain BUY with an unchanged TP of S$2.30 based on 15x FY11 P/E.

http://www.remisiers.org/cms_images/16_M...atters.pdf

Will be a massive boost to its order-book and will keep it busy for the next few years. Lower gross margins but a necessity in order to move up the value chain and compete with the Koreans.

first, Yangzijiang did not confirm the LOI. too much speculation...

second, 98 million or 95 million per 10,000 TEU boxship, the margin will be very thin, high single digit according to some comment.

Nextinsight article on the latest contract speculation.

http://www.nextinsight.net/index.php/sto...n-aprilmay

(Not Vested)

buy on rumor, sell on news?

......

(17-03-2011, 08:58 PM)freedom Wrote: buy on rumor, sell on news?

......

Clearly, the name of the game !

YZJ is using volume to counteract margin compression to grow. Will it work hmm ?

I was reading YZJ latest AR with great interest [ http://info.sgx.com/listprosp.nsf/6c6be9...8002bd534/$FILE/Yangzijiang%20Shipbuilding%20%28Holdings%29%20Ltd.%20-%202010%20AR%28E%29.pdf ]. The Group has set its sights into become a conglomerate within the next 5 years by venturing into new business streams while growing its own business. The Group seeks to increase its profitability by i) Increasing its ship-building capacity to offset the drop in newbuilding prices though M&A of weaker yards ii) Expand into other areas of the marine engineering value chain iii) Enter the offshore market with its PPL yard stake iv) Continue to grow its financing and investment division and v) Form JV with property developers to create a real estate division.

At the moment, YZJ market capitalization stands at S$7.28 billion making it the largest S Chip listed here. Do you think it has the expertise to achieve its aim within the next 5 years ?

(Not Vested)

Yangzijiang starting 2011 on a positive note with 63% increase in quarterly earnings to record high of RMB954.9 million for 1Q2011

SHIPBUILDING CONTRACTS WITH SEASPAN CORPORATION

http://info.sgx.com/webcoranncatth.nsf/V...A002E7A0B/$file/Announcement_ShipbuildingContracts.pdf?openelement

YZJ secured US$0.7 billion contract to build 7 X 10,000 TEU vessels for Seaspan Corp. The contract comes with options to purchase 18 X 10,000 TEU vessels for US$1.8 billion. The vessels will be delivered in 2014 - 2015 and will most likely be built on YZJ new yard (under development). While the gross margin is unlikely to be as fat as pre-crisis contracts, the sheer size of the contract should generate sufficient profit to maintain its growth. Execution and teething problems will be a big risk though.

(Not Vested)