Yangzijiang Shipbuilding (Holdings)

[CityFarmer]

Brief report on YZJ 1QFY2014 result below. Need time to analyse in detail on the report...

(vested)

Investments boost Yangzijiang's 11% Q1 growth
30 Apr 2014 08:30
Yangzijiang Shipbuilding (Holdings) posted an 11 per cent gain in first-quarter net profit on the back of strong investment returns, the shipbuilder announced early Wednesday.

Net profit attributable to shareholders rose to 799.2 million yuan, or 20.86 yuan cents per share, as revenue grew 24 per cent to 3.6 billion yuan.

No dividends were announced.

Turnover from the shipbuilding segment increased by 18.4 per cent to 2.9 billion yuan as the company delivered seven vessels during the quarter. But a 34.8 per cent increase in cost of goods sold sent the segment's gross profit down 28.6 per cent to 457 million yuan.

Held-to-maturity investments picked up the slack, with a 50 per cent jump in gross profit to 561.5 millino yuan as interest income rose.

Year-to-date, Yangzijiang has secured US$1.07 billion of orders for 26 vessels. Its order book currently stands at 125 vessels worth US$5.2 billion through 2016.

Source: Business Times Breaking News

[greengiraffe]

Based on the summary, the quality of earnings doesn't look great and is indicative of the competitive pressures as a result of the well known over capacity amongst Chinese shipyards.

In any event, anyone investing in YZJ should be focus on the yard's ability to generate earnings and not its ability to generate investment returns that made up of the total returns.

Anyway, as late Chairman Mao's famous quote - "As long as the cat catches mice, it doesn't matter what colour is the cat."

Not Vested
GG

Brief report on YZJ 1QFY2014 result below. Need time to analyse in detail on the report...

(vested)

Investments boost Yangzijiang's 11% Q1 growth
30 Apr 2014 08:30
Yangzijiang Shipbuilding (Holdings) posted an 11 per cent gain in first-quarter net profit on the back of strong investment returns, the shipbuilder announced early Wednesday.

Net profit attributable to shareholders rose to 799.2 million yuan, or 20.86 yuan cents per share, as revenue grew 24 per cent to 3.6 billion yuan.

No dividends were announced.

Turnover from the shipbuilding segment increased by 18.4 per cent to 2.9 billion yuan as the company delivered seven vessels during the quarter. But a 34.8 per cent increase in cost of goods sold sent the segment's gross profit down 28.6 per cent to 457 million yuan.

Held-to-maturity investments picked up the slack, with a 50 per cent jump in gross profit to 561.5 millino yuan as interest income rose.

Year-to-date, Yangzijiang has secured US$1.07 billion of orders for 26 vessels. Its order book currently stands at 125 vessels worth US$5.2 billion through 2016.

Source: Business Times Breaking News

[Greenrookie]

Based on the summary, the quality of earnings doesn't look great and is indicative of the competitive pressures as a result of the well known over capacity amongst Chinese shipyards.

In any event, anyone investing in YZJ should be focus on the yard's ability to generate earnings and not its ability to generate investment returns that made up of the total returns.

Anyway, as late Chairman Mao's famous quote - "As long as the cat catches mice, it doesn't matter what colour is the cat."

Not Vested
GG

Brief report on YZJ 1QFY2014 result below. Need time to analyse in detail on the report...

(vested)

Investments boost Yangzijiang's 11% Q1 growth
30 Apr 2014 08:30
Yangzijiang Shipbuilding (Holdings) posted an 11 per cent gain in first-quarter net profit on the back of strong investment returns, the shipbuilder announced early Wednesday.

Net profit attributable to shareholders rose to 799.2 million yuan, or 20.86 yuan cents per share, as revenue grew 24 per cent to 3.6 billion yuan.

No dividends were announced.

Turnover from the shipbuilding segment increased by 18.4 per cent to 2.9 billion yuan as the company delivered seven vessels during the quarter. But a 34.8 per cent increase in cost of goods sold sent the segment's gross profit down 28.6 per cent to 457 million yuan.

Held-to-maturity investments picked up the slack, with a 50 per cent jump in gross profit to 561.5 millino yuan as interest income rose.

Year-to-date, Yangzijiang has secured US$1.07 billion of orders for 26 vessels. Its order book currently stands at 125 vessels worth US$5.2 billion through 2016.

Source: Business Times Breaking News

The core shipbuilding segment, excluding ship demolition and the likes has a margin of 24%. While nothing to shout about, IMO is decent, given Ren Himself has been candid about the delivery of lower margins ships.

It is 16% due to the other the trading sub-segment within the shipbuilding segment. If you do the maths, this "non-core" shipbuilding segment has margin of only about 1.5%. Too Dangerous low to loss-making, IMO. The core shipbuilding business, is rather healthy, consider the lower margin order-book. As long as steel and engines prices do not escalate, it should do ok. China still prices is still in weak, I have no way of tracking engine parts costs. Not sure if anyone can enlighten me on that.

I saw a few concerns though:
1) receivables increasing significantly faster than revenue

I am not sure if the reduction of the total HTM investments mark the end of accumulation of such investments.

For YZJ, I think we need to see both the HTM and Shipping capabilities in totality, we cannot isolated one from the other.

[greengiraffe]

Based on the summary, the quality of earnings doesn't look great and is indicative of the competitive pressures as a result of the well known over capacity amongst Chinese shipyards.

In any event, anyone investing in YZJ should be focus on the yard's ability to generate earnings and not its ability to generate investment returns that made up of the total returns.

Anyway, as late Chairman Mao's famous quote - "As long as the cat catches mice, it doesn't matter what colour is the cat."

Not Vested
GG

Brief report on YZJ 1QFY2014 result below. Need time to analyse in detail on the report...

(vested)

Investments boost Yangzijiang's 11% Q1 growth
30 Apr 2014 08:30
Yangzijiang Shipbuilding (Holdings) posted an 11 per cent gain in first-quarter net profit on the back of strong investment returns, the shipbuilder announced early Wednesday.

Net profit attributable to shareholders rose to 799.2 million yuan, or 20.86 yuan cents per share, as revenue grew 24 per cent to 3.6 billion yuan.

No dividends were announced.

Turnover from the shipbuilding segment increased by 18.4 per cent to 2.9 billion yuan as the company delivered seven vessels during the quarter. But a 34.8 per cent increase in cost of goods sold sent the segment's gross profit down 28.6 per cent to 457 million yuan.

Held-to-maturity investments picked up the slack, with a 50 per cent jump in gross profit to 561.5 millino yuan as interest income rose.

Year-to-date, Yangzijiang has secured US$1.07 billion of orders for 26 vessels. Its order book currently stands at 125 vessels worth US$5.2 billion through 2016.

Source: Business Times Breaking News

The core shipbuilding segment, excluding ship demolition and the likes has a margin of 24%. While nothing to shout about, IMO is decent, given Ren Himself has been candid about the delivery of lower margins ships.

It is 16% due to the other the trading sub-segment within the shipbuilding segment. If you do the maths, this "non-core" shipbuilding segment has margin of only about 1.5%. Too Dangerous low to loss-making, IMO. The core shipbuilding business, is rather healthy, consider the lower margin order-book. As long as steel and engines prices do not escalate, it should do ok. China still prices is still in weak, I have no way of tracking engine parts costs. Not sure if anyone can enlighten me on that.

I saw a few concerns though:
1) receivables increasing significantly faster than revenue

I am not sure if the reduction of the total HTM investments mark the end of accumulation of such investments.

For YZJ, I think we need to see both the HTM and Shipping capabilities in totality, we cannot isolated one from the other.

Good to hear from the expert on YZJ. I have no vested interests in a complicated shipping conglomerate with vast interests across many potential "land mines" in China.

GG

[specuvestor]

Based on the summary, the quality of earnings doesn't look great and is indicative of the competitive pressures as a result of the well known over capacity amongst Chinese shipyards.

In any event, anyone investing in YZJ should be focus on the yard's ability to generate earnings and not its ability to generate investment returns that made up of the total returns.

Anyway, as late Chairman Mao's famous quote - "As long as the cat catches mice, it doesn't matter what colour is the cat."

Not Vested
GG

Just to correct that the quote was spoken by Deng xiaoping and landed him in another purge

It is the business owners that should be aware that their core business and sidelines are not complementary and if it adds value. Shareholders certainly can voice out but end of day OPMI like us can only take the package and not just pick and choose, like the oft quoted flawed ex-cash type of analysis. U have to take in the lemon with any analysis.

[greengiraffe]

Based on the summary, the quality of earnings doesn't look great and is indicative of the competitive pressures as a result of the well known over capacity amongst Chinese shipyards.

In any event, anyone investing in YZJ should be focus on the yard's ability to generate earnings and not its ability to generate investment returns that made up of the total returns.

Anyway, as late Chairman Mao's famous quote - "As long as the cat catches mice, it doesn't matter what colour is the cat."

Not Vested
GG

Just to correct that the quote was spoken by Deng xiaoping and landed him in another purge

It is the business owners that should be aware that their core business and sidelines are not complementary and if it adds value. Shareholders certainly can voice out but end of day OPMI like us can only take the package and not just pick and choose, like the oft quoted flawed ex-cash type of analysis. U have to take in the lemon with any analysis.

Hi Specuvestor,

Thanks for your correction. I was thinking of Deng but quoted Mao as the person.

Cheers
GG

[Greenrookie]

A research report from
cimb
https://cimbequityresearch.cimb.com/EFAO...C79&A=CIMB

Surprised that the 2 semi- subm rig are cancelled due to Failure to secure fianciang. always thought PPL is financial strong...

Anyone been to AGM? Is there any updates on Ren retirement plans?

[CityFarmer]

A research report from
cimb
https://cimbequityresearch.cimb.com/EFAO...C79&A=CIMB

Surprised that the 2 semi- subm rig are cancelled due to Failure to secure fianciang. always thought PPL is financial strong...

Anyone been to AGM? Is there any updates on Ren retirement plans?

The retirement is real, but not immediate, but after his succession plan. The reporter is jumping the gun over the issue.

There are few points to add, base on the 1Q report
- Rather be just a lender, the company starting to invest the fund into business ventures. The HTM's asset will continue to scale down, and the money will be channelled into real business venture, from approx 14 bil in FY2013, to approx 12 bil 1QFY2014, and will continue be reduced thereafter, IMO.
- Two cash flow will be accounted in FY14, one is the relocation fee, the other one is the tax rebate.
- Shipbuilding (together with other shipbuilding related business) margin will go down further, due to other related businesses' lower margin, including the trading business. Trading business is highly scalable, but with very low margin.

(vested)

[CityFarmer]

After the delivery from New Yangzi yard, Xinfu yard joined the club to deliver the 2nd 10,000TEU containership of the group. More are in the delivery queue...

(vested)

Yangzijiang’s Xinfu yard delivered maiden 10,000TEU containership
 Xinfu yard is now fully operational, targets to deliver 6 additional units of 10,000TEU containerships in 2014
 To date, Yangzijiang has secured a total of 21 units of 10,000TEU containerships from New York-listed Seaspan Corporation, of which 1st unit had already been delivered by New Yangzi yard
...
http://infopub.sgx.com/FileOpen/PressRel...eID=295564

[susan66]

I expect more upside, entered since 1.115, sold for some profits. Cheers & congrats to all who have entered.