Yangzijiang Shipbuilding (Holdings)

http://infopub.sgx.com/FileOpen/YZJ%20Pr...eID=301756

Yangzijiang inks contract for its largest ever bulk carriers

This contract consists of four 260,000DWT very large ore carriers, secured from the Group’s first Australian customer. The shipbuilding contract was secured from an Australia based ore company listed on the Australian Securities Exchange and the contract is the first of its kind in Yangzijiang’s orderbook. Yangzijiang’s ability to break into Australia, a new geographical reach, continues to demonstrate shipowners’ growing confidence in Yangzijiang’s shipbuilding competency. Yangzijiang expects to deliver the VLOCs from 2016 to 2017.

Fortescue invests in larger vessels for iron ore shipments


FORTESCUE Metals Group will spend $US275 million ($292m) buying four specialist iron ore ships in a show of confidence amid continued iron ore price weakness.

Fortescue said the four vessels would improve efficiencies and lower costs at Port Hedland, through which Fortescue ships all its iron ore production.

Fortescue said the ships, which will be built in a Chinese shipyard, would be much larger than the traditional Cape-size vessels that dominate the seaborne iron ore industry and were designed specifically for Port Hedland’s shallow harbour and tidal conditions. The ships will be delivered between November 2016 and May 2017.

The latest investment commitment comes at a volatile time for iron ore prices, which have fallen to their lowest levels in 21 months.

The benchmark iron ore price dropped to $US90.90 a tonne at the weekend, its lowest level since September 2012. The price has now fallen by almost 35 per cent since December last year.

Deutsche Bank yesterday became the latest broker to downgrade its iron ore price forecasts, trimming 2.6 per cent and 10.3 per cent off its 2014 and 2015 estimates respectively, while Morgan Stanley last week slashed its price forecasts for the next five years by 11 per cent to 21 per cent.

A strong rise in iron ore export volumes coupled with weaker Chinese economic growth has contributed to the price falls.

Patersons Securities analyst Rob Brierley said the larger cap­acity of Fortescue’s new ships could help it maintain or lift its shipments out of Port Hedland even if other parties begin shipping out of the congested port.

“Everyone knows that Fortescue has significantly more ­capacity than they do port allocation. It’s not an issue at the moment but sooner or later, if some of these other mines ever get up, they could be squeezed,” Mr Brierley said.

“One of the ways of mitigating the potential squeeze would be to have bigger ships.”

Fortescue chief Nev Power said the vessels would help lower freight costs and maximise iron ore export volumes.

“These vessels are a natural extension of our supply chain and will play a significant role in increasing efficiencies at the port and lowering costs,” Mr Power said. “They also reflect and strengthen our close relationship with China, our largest customer.”

The four ships will each be capable of carrying 260,000 tonnes of iron ore, which will rank them among the biggest ships servicing Port Hedland.

Last month, only three of the 202 iron ore shipments to leave the port carried 250,000 tonnes or more of iron ore and none carried 260,000 tonnes. Most of the ships carried between 170,000 and 220,000 tonnes.

Shares in Fortescue, which traded as high as $6.02 in February, closed unchanged at $4.06

(18-06-2014, 08:43 AM)desmondxyz Wrote: http://infopub.sgx.com/FileOpen/YZJ%20Pr...eID=301756

Yangzijiang inks contract for its largest ever bulk carriers

This contract consists of four 260,000DWT very large ore carriers, secured from the Group’s first Australian customer. The shipbuilding contract was secured from an Australia based ore company listed on the Australian Securities Exchange and the contract is the first of its kind in Yangzijiang’s orderbook. Yangzijiang’s ability to break into Australia, a new geographical reach, continues to demonstrate shipowners’ growing confidence in Yangzijiang’s shipbuilding competency. Yangzijiang expects to deliver the VLOCs from 2016 to 2017.

The capacity till 2016 has been fully utilized. The new order is filling in the capacity from 2016. I reckon soon the capacity of 2016-2017 will be fully utilized soon...

In the announcement, there are also news from the 10,000TEU containership deliveries. The deliveries of 4th was done, and the 5th is on its way.

(vested)

(18-06-2014, 09:01 AM)Ken123456 Wrote: Fortescue invests in larger vessels for iron ore shipments


FORTESCUE Metals Group will spend $US275 million ($292m) buying four specialist iron ore ships in a show of confidence amid continued iron ore price weakness.

Fortescue said the four vessels would improve efficiencies and lower costs at Port Hedland, through which Fortescue ships all its iron ore production.

Fortescue said the ships, which will be built in a Chinese shipyard, would be much larger than the traditional Cape-size vessels that dominate the seaborne iron ore industry and were designed specifically for Port Hedland’s shallow harbour and tidal conditions. The ships will be delivered between November 2016 and May 2017.

The latest investment commitment comes at a volatile time for iron ore prices, which have fallen to their lowest levels in 21 months.

The benchmark iron ore price dropped to $US90.90 a tonne at the weekend, its lowest level since September 2012. The price has now fallen by almost 35 per cent since December last year.

Deutsche Bank yesterday became the latest broker to downgrade its iron ore price forecasts, trimming 2.6 per cent and 10.3 per cent off its 2014 and 2015 estimates respectively, while Morgan Stanley last week slashed its price forecasts for the next five years by 11 per cent to 21 per cent.

A strong rise in iron ore export volumes coupled with weaker Chinese economic growth has contributed to the price falls.

Patersons Securities analyst Rob Brierley said the larger cap­acity of Fortescue’s new ships could help it maintain or lift its shipments out of Port Hedland even if other parties begin shipping out of the congested port.

“Everyone knows that Fortescue has significantly more ­capacity than they do port allocation. It’s not an issue at the moment but sooner or later, if some of these other mines ever get up, they could be squeezed,” Mr Brierley said.

“One of the ways of mitigating the potential squeeze would be to have bigger ships.”

Fortescue chief Nev Power said the vessels would help lower freight costs and maximise iron ore export volumes.

“These vessels are a natural extension of our supply chain and will play a significant role in increasing efficiencies at the port and lowering costs,” Mr Power said. “They also reflect and strengthen our close relationship with China, our largest customer.”

The four ships will each be capable of carrying 260,000 tonnes of iron ore, which will rank them among the biggest ships servicing Port Hedland.

Last month, only three of the 202 iron ore shipments to leave the port carried 250,000 tonnes or more of iron ore and none carried 260,000 tonnes. Most of the ships carried between 170,000 and 220,000 tonnes.

Shares in Fortescue, which traded as high as $6.02 in February, closed unchanged at $4.06

Well researched! Ken123456.

Booyah you!

I thought the more interesting part was the comment on the finance side of business and the eventual divestment.

**************

The Group wishes to reassure our shareholders that our investment size into non- core businesses i.e. investment in held to maturity and property development will be closely monitored and kept under control, and we would like to reiterate that our focus remains on our core shipbuilding business. Our key strategy is to redirect attention from our non-core businesses into our core shipbuilding and its related businesses such as shipping logistic and trading business. The Group will gradually reduce our investment in non-core businesses and eventually divest these businesses.

(18-06-2014, 11:55 AM)AlphaQuant Wrote: I thought the more interesting part was the comment on the finance side of business and the eventual divestment.

**************

The Group wishes to reassure our shareholders that our investment size into non- core businesses i.e. investment in held to maturity and property development will be closely monitored and kept under control, and we would like to reiterate that our focus remains on our core shipbuilding business. Our key strategy is to redirect attention from our non-core businesses into our core shipbuilding and its related businesses such as shipping logistic and trading business. The Group will gradually reduce our investment in non-core businesses and eventually divest these businesses.

The withdrawal from HTM already started since Q1FY2014. The HTM asset was reduced from a peak of RMB 14.1 billion, to 12.8 billion in the latest quarter Q1FY2014. The next coming quarter should be reduced further to around 10 billion.

With the regulator relaxing the rule for private bond, the existing trend is the demand of expansive shadow banking is reducing, and credit is re-directed to cheaper private bond market.

The company is able to withdraw gracefully from HTM within 1-2 year, or average RMB 2 billion per quarter, if needed. I do see the need to withdraw, since no point competing with private bond on the interest income.

Next question is where is the fund withdrawn? Base on last quarter report, partly for M&A, partly to pay down the debt.

May be Mr. Market will re-rate the company, with reducing concern on the HTM?

(vested)

揚子江船業(911609)雙喜臨門

Anyone understand this number 911609. 4Dthis week?

http://infopub.sgx.com/FileOpen/Press%20...eID=301921

(19-06-2014, 08:18 AM)Ken123456 Wrote: 揚子江船業(911609)雙喜臨門

Anyone understand this number 911609. 4Dthis week?

http://infopub.sgx.com/FileOpen/Press%20...eID=301921

The number is the stock code for Taiwan listing.

It is no doubt Shipbuilding is one of the China national strategic sectors. It seems YZJ is one of the core players in the China national game plan. May be the key reason behind the recent announcement to re-focus on shipbuilding.

Shipbuilding sector provides abundant quality employment that China gov is seeking.

More good time (喜臨門) coming?

(vested, and may be biased)

CIMB analyst report, TP $1.56. rating ADD.

I am sure the gradual exit of HTM asset, but I am not so sure on the property development.

(vested)

------------
Banker no more
Winning new contracts, consisting of four 260,000DWT very large ore carriers from Australia, was not the landmark for YZJ but its gradual exit from non-core businesses (investments in held-to-maturity assets and property development) is the breakthrough that could catalyse the stock. We turn positive on YZJ, upgrading it from a Hold to an Add with a revised target price of S$1.56, now based on 1.7x CY14 P/BV or 0.5 s.d. below its 5-year mean (1.2x P/BV prev.) as the overhanging fear of a ‘blow-up’ is removed. Our FY14-16 EPS is cut by 9-15% for lower investment income that is offset by higher interest income from normal deposits. Our target price implies a CY15 P/E of 10x, a fraction of Cosco Corp’s current valuation of 33x CY15.

http://remisiers.org/cms_images/research...14_Add.pdf

YZJ's HTM investment was via trust companies. So one more confirming indicator on the withdrawal of HTM investment...

(vested)

China’s Structured Product Offerings Drop on Shadow Bank Curbs

Chinese structured product offerings dropped by the most in six months in June after the government put in place measures to curb the shadow-banking industry, restricting issuers’ ability to sell the investments.

The number of securities fell 14 percent to 197, compared with average growth of 8.4 percent in the first five months, according to Cnbenefit, a consulting firm that focuses on wealth management. The company collected the data from publicly available information and also through agreements with some banks.

Premier Li Keqiang has sought to stem expansion of trust companies, wealth management products and other forms of shadow banking, which Barclays Plc estimates was worth 38.8 trillion yuan ($6.3 trillion) as of the end of last year. The central bank introduced steps in May that included ordering lenders to curb interbank borrowing. The banking regulatory tightened regulation of new trust products in April.

“The Chinese central bank’s move to curb interbank borrowing may dry up liquidity and affect funding for wealth management products,” said Francis Chan, who follows the financial sector in Asia for Bloomberg Industries. “Together with a clampdown on trust-related wealth management products, that may have caused sales of structured products to fall.”
...
http://www.bloomberg.com/news/2014-07-11...curbs.html