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22-08-2011, 10:04 AM
I had looked through the financial results of YZJ for the past 5 years. I must say quantitatively, its had been impressive (in fact one of the most impressive I've seen so far).
5 year: Equity, Sales, income, OCF and FCF: increasing steadily (all of them have 5 year CAGR of >50%)
1 year: Equity, Sales, income, OCF and FCF: still doing very well (growth of between 15-60%++)
ROE had been relatively stable but high the past 5 years, mostly between 20%-30%.
ROE currently about 30% (This compares with say, Cosco, of around 20%)
LT-Debt is very low at about 4%, which meant ROIC is about the same as ROE.
P/E is pretty low at <$7.
NBV though, is around 0.5 compared with the market price of around 1 now.
Dividends paid since is not very high, but still respectable.
My impression of YZJ's management is pretty good. They took good advantage of the crisis in 2008 and bought over smaller shipyards as a means of expansion. The management took steps to diversify in view of the higher over-supply of vessels. I do agree though, that the main risks lies with the declining margin of newer contracts and it looking into other sectors for diversification.
My estimated intrinsic value tells me YZJ is now undervalued. I am already vested but would really get excited if it does goes down to $0.85. The directors have been buying recently at a price of between about $1 to $1.1. I intend to hold YZJ for the long term, say 4-10 years.
(Vested)
5 year: Equity, Sales, income, OCF and FCF: increasing steadily (all of them have 5 year CAGR of >50%)
1 year: Equity, Sales, income, OCF and FCF: still doing very well (growth of between 15-60%++)
ROE had been relatively stable but high the past 5 years, mostly between 20%-30%.
ROE currently about 30% (This compares with say, Cosco, of around 20%)
LT-Debt is very low at about 4%, which meant ROIC is about the same as ROE.
P/E is pretty low at <$7.
NBV though, is around 0.5 compared with the market price of around 1 now.
Dividends paid since is not very high, but still respectable.
My impression of YZJ's management is pretty good. They took good advantage of the crisis in 2008 and bought over smaller shipyards as a means of expansion. The management took steps to diversify in view of the higher over-supply of vessels. I do agree though, that the main risks lies with the declining margin of newer contracts and it looking into other sectors for diversification.
My estimated intrinsic value tells me YZJ is now undervalued. I am already vested but would really get excited if it does goes down to $0.85. The directors have been buying recently at a price of between about $1 to $1.1. I intend to hold YZJ for the long term, say 4-10 years.
(Vested)