Yangzijiang Shipbuilding (Holdings)

[weijian]

After a hiatus more than 2 years, YZJSB has started SBB again. To date, they have spent ~30mil in the last 2-3 weeks since Liberation day. This is still much less than the money spent in prior years between 2018-2022.

The majority of the shares bought in earlier years were used to fully owned a subsidiary shipyard and meet the obligations of a 50mil convertible bond. As end FY24, there is plenty of cash on its BS even after all the recent CAPEX announcements (new shipyard + LNG terminal) and the amount of customer deposits has also given it a negative working capital (receivables/contract assets/inventories minus off customer deposits/payables) like that of a grocer!

It will be interesting to see the extent of the current SBB and also how they will eventually use these treasury shares.

Share buy-back by way of market acquisition.

https://links.sgx.com/1.0.0/corporate-an...3d8493926b

[weijian]

YZJSB share price has recovered from its Liberation Day lows and it was also during those lows that Chairman Ren astutely did SBB. However, SBB has stopped as company has turned cautious and decide to prioritize conservation of cashflows for its current expansion programs.

MINUTES OF THE NINETEENTH ANNUAL GENERAL MEETING

2. Please provide some insight into whether any customers have deferred or cancelled orders? How is the Group’s capital allocation? What are the approaches the Group prepares to navigating U.S. tariffs and global market uncertainties?

Based on the records, the Company’s existing order book has remained stable. As at the date of this AGM, none of the clients raise concerns regarding order cancellation, delivery delays. The Company remains committed to maintaining a dividend payout ratio of 30% to 40% of net profit annually.

With respect to capital expenditure, the two major projects are currently working in progress: (i) the capacity expansion on the land adjacent to the Xinfu Yard, Project Hongyuan, and (ii) the Project of LNG Terminal Conversion and Storage Facilities. The total capital expenditure for both projects is within RMB 5 billion.

On the share buyback programme, the Company remains committed to buy-back shares during periods of share price volatility to safeguard the Shareholders’ interests. Nevertheless, in view of ongoing macroeconomic uncertainties, the Company will prioritise the preservation of cash flow to support future strategic initiatives with its prudent capital management strategy.

5. Has the Group secured any new orders amid the prevailing market uncertainties?

The current tariffs and related trade measures have not affected the Group’s existing order book. However, they have influenced the sentiment of prospective clients and have led to delays in finalising new contracts. While several Letters of Intent for new shipbuilding orders have been executed, some clients have requested to defer their confirmation and pending greater clarity on the outcome of the ongoing trade negotiations between the United States and China

The tariff situation has primarily affected the vessels designated for the US market. However, the Group has received a rise in inquiries for smaller-sized container vessels, particularly in the 3,000 – 4,000 Twenty-Foot Equivalent Units (“TEU”) range. This increase in interest was partly driven by recent regulatory changes, which exempt Chinese-built vessels below 4,000 TEU from certain port fees in the US

https://links.sgx.com/FileOpen/YZJSH%20-...eID=846160