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Yangzijiang 1Q2015 earnings down 12% to RMB706.9 million
By Frankie Ho / theedgemarkets.com | April 30, 2015 : 6:09 AM MYT
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SINGAPORE (April 30): Lower shipbuilding margins and interest income sent Yangzijiang Shipbuilding's earnings down 12% y-o-y to RMB706.9 million ($152.9 million) in 1Q2015.
Revenue fell 14% to RMB3.04 billion.
A drop in interest income from its held-to-maturity investments, which the company has been scaling down, as well as lower contributions from its shipbuilding-related trading business, offset a pickup in shipbuilding revenue.
Yangzijiang delivered 10 vessels during the quarter, up from seven in the same period last year. Gross margins for its shipbuilding business slipped to 21% from 24%.
New orders flows were strong in early 2014 but tapered off for the rest of the year as demand fell, an outcome that spilled over into 2015, according to the shipbuilder.
Globally, a total of 211 new vessels comprising 16.6 million dead-weight tonnes were ordered in 1Q2015, down 43% y-o-y, it said.
Yangzijiang's order book stands at US$4.6 billion ($6.1 billion), comprising 114 vessels, which will keep its yards busy till end-2016.
China's shipbuilding industry still faces overcapacity, with utilization down to 60% this year from 75% in 2010, the company noted.
"We will continue monitoring the market, study the M&A opportunities that are presented to the group from time to time," it said in a statement today.
"However, our prime goal is to enhance shareholder value and the competiveness of the group in the long run, and the group will only consider M&A opportunities that offer favourable return and are accretive to our core shipbuilding business."
Yangzijiang shares ended 1% lower at $1.445 yesterday.
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This set of results is kind of expected in view of rising costs in China coupled with the stiffening competition for the global offshore industry due to sudden drop in oil prices...
However, share price remain firm... disconnect between share price and reality?
Not Vested, Busybody
GG
(30-04-2015, 08:11 AM)Happymeowmeow Wrote: Yangzijiang 1Q2015 earnings down 12% to RMB706.9 million
By Frankie Ho / theedgemarkets.com | April 30, 2015 : 6:09 AM MYT
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SINGAPORE (April 30): Lower shipbuilding margins and interest income sent Yangzijiang Shipbuilding's earnings down 12% y-o-y to RMB706.9 million ($152.9 million) in 1Q2015.
Revenue fell 14% to RMB3.04 billion.
A drop in interest income from its held-to-maturity investments, which the company has been scaling down, as well as lower contributions from its shipbuilding-related trading business, offset a pickup in shipbuilding revenue.
Yangzijiang delivered 10 vessels during the quarter, up from seven in the same period last year. Gross margins for its shipbuilding business slipped to 21% from 24%.
New orders flows were strong in early 2014 but tapered off for the rest of the year as demand fell, an outcome that spilled over into 2015, according to the shipbuilder.
Globally, a total of 211 new vessels comprising 16.6 million dead-weight tonnes were ordered in 1Q2015, down 43% y-o-y, it said.
Yangzijiang's order book stands at US$4.6 billion ($6.1 billion), comprising 114 vessels, which will keep its yards busy till end-2016.
China's shipbuilding industry still faces overcapacity, with utilization down to 60% this year from 75% in 2010, the company noted.
"We will continue monitoring the market, study the M&A opportunities that are presented to the group from time to time," it said in a statement today.
"However, our prime goal is to enhance shareholder value and the competiveness of the group in the long run, and the group will only consider M&A opportunities that offer favourable return and are accretive to our core shipbuilding business."
Yangzijiang shares ended 1% lower at $1.445 yesterday.
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marine related industry seems to be fundamentally worsening
as seen from SMM KC and YZJ.. all their marine business had a big drop in earnings of 10-14%
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Simply base on 1Q2015 result, the drop of -14% overall revenue, was mainly contributed by HTM, due to down-sizing of HTM biz. Shipbuilding revenue drop -6%, while HTM revenue drop more than half.
Gross Profit wise, shipbuilding improved +11%, with better margin. HTM gross profit reduced more than half, due to downsizing.
I would rather conclude that core shipbuilding biz is improving, amid a headwind, while the "most-concerned" HTM biz has been continue downsizing. More spare cash will be piled up, for potential M&A in shipbuilding.
That seems connected with the share price performance, IMO.
(vested)
(30-04-2015, 09:24 AM)greengiraffe Wrote: This set of results is kind of expected in view of rising costs in China coupled with the stiffening competition for the global offshore industry due to sudden drop in oil prices...
However, share price remain firm... disconnect between share price and reality?
Not Vested, Busybody
GG
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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I see, no wonder YZJ is up today, despite the weak market
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Attended YZJ's AGM a while ago. Chairman Ren impressed the meeting with his candidness and knowledge on the shipbuilding industry.
With a capable management (performance of YZJ in the troubled years shows this) with integrity (willing to admit that property investment is a mistake) and also shareholder-friendly (high dividend payout, extremely low remuneration of key executives etc), YZJ is definitely a keeper at these prices.
(Vested since 2013)
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It is a substantial deal, which will make a high impact on earning and asset, depend on the negotiation. The company should be able to get a good deal, with its financial strength...
(vested)
Yangzijiang Shipbuilding in early talks on Rongsheng investment
SINGAPORE (April 30): China's Yangzijiang Shipbuilding Holdings ( Financial Dashboard) is considering a possible investment in troubled peer China Huarong Energy, formerly known as China Rongsheng, its executive chairman said on Thursday.
Ren Yuanlin said the company was still in early talks with stakeholders, and expected to make a decision on the investment by end-June.
"The government, banks, and Rongsheng's major shareholder all hope we can be part of the deal, but whether or not we will get in depends on the asset price," he told reporters at a post-earnings briefing in Singapore, where the company is listed.
"We are not interested in anyone else but Rongsheng."
...
http://www.theedgemarkets.com/sg/article...investment
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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http://infopub.sgx.com/FileOpen/_YZJ%20F...eID=347975
Interesting, BlackRock increased its stake in YZJ by 0.01% to reveal itself as substantial shareholder....
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The warrants are likely a near-term overhang?
(vested)
Yangzijiang downgraded to 'neutral' by Credit Suisse
SINGAPORE (May 26): Credit Suisse has downgraded Yangzijiang Shipbuilding to "neutral" from "outperform", citing limited upside to its $1.50 price target and concerns over earnings dilution as a batch of warrants issued in 2013 are due to expire in April next year.
The shipbuilder issued 330 million warrants at 30.72 RMB cents each in February 2013. They can be converted into shares at a price of RMB6.60 ($1.42).
"(The) warrants are likely to be a near-term overhang," Credit Suisse analysts Gerald Wong and Hwang Shih Huar wrote in a note.
...
http://www.theedgemarkets.com/sg/article...dit-suisse
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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Mr. Ren Yuanlin continue to utilize the company cash reserve. Take it at face value, the JV is registered with a paid-up capital of RMB 550 million and YZJ takes 23.6% stake with RMB 130 million. A listed company in Shenzhen will acquire the JV by book value in future, with share placement @RMB 19.16 per share, a 50% discount of the current market price of RMB 38.
http://infopub.sgx.com/FileOpen/Announce...eID=356634
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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