Yangzijiang Shipbuilding (Holdings)

[CityFarmer]

Like I say its the poor macro outlook not the just the segment that YZJ is operating in. Overall, global O&G and shipbuilding industry is cyclical. China to me no longer has the competitive advantage in mfging across a broad segment and hence the need to resort to weakening of Chinese Yuan.

In addition, I remain puzzled over why YZJ is doing relatively well compared to other China based yards such as Cosco Pacific - really puzzled over the big picture.

Not Vested
GG

YZJ management has never denied the tough time for shipbuilding.

I reckon there might be two reasons

- The company has an alternative source of revenue i.e. Investment. It has allowed choices, the choices on margin over sales. It has also allowed the company to reject contracts without sufficient down-payment. The shipbuilding revenue and segment profit in FY2014, was 80% and 65% of the peak year in FY2011 (Source: Segment Info in ARs). Keppel Corp is doing the same, diversification. The Keppel land will provide alternative revenue source, for the O&G segment, right?

- The company financial strength has given shipowners, as well the financial institutions the confidence on deliveries and financial supports. Good contracts have gone to YZJ, rather than to other shaky shipbuilders.

(sharing few points on the company)

[greengiraffe]

Like I say its the poor macro outlook not the just the segment that YZJ is operating in. Overall, global O&G and shipbuilding industry is cyclical. China to me no longer has the competitive advantage in mfging across a broad segment and hence the need to resort to weakening of Chinese Yuan.

In addition, I remain puzzled over why YZJ is doing relatively well compared to other China based yards such as Cosco Pacific - really puzzled over the big picture.

Not Vested
GG

YZJ management has never denied the tough time for shipbuilding.

I reckon there might be two reasons

- The company has an alternative source of revenue i.e. Investment. It has allowed choices, the choices on margin over sales. It has also allowed the company to reject contracts without sufficient down-payment. The shipbuilding revenue and segment profit in FY2014, was 80% and 65% of the peak year in FY2011 (Source: Segment Info in ARs). Keppel Corp is doing the same, diversification. The Keppel land will provide alternative revenue source, for the O&G segment, right?

- The company financial strength has given shipowners, as well the financial institutions the confidence on deliveries and financial supports. Good contracts have gone to YZJ, rather than to other shaky shipbuilders.

(sharing few points on the company)

YZJ is a company that will survive. Its a chosen vehicle by the Central to focus on a certain segment of the ship building sector.

However, one must differentiate between unsystematic and systematic risks. YZJ is trying to be an efficient builder but the bigger over riding concern remains the downturn of the O&G sector and its spillover impact on the entire global industry.

Financing ship owners in order to bag contracts is also a dangerous thing and it is almost equivalent to buying contracts. Such an act in my opinion happens when industry conditions are not favourable that financial institutions are not willing to finance ship owners forcing them to turn to builders.

Contrast this to SSC's purchase of RoRo where Japanese govt backed financial institution finance 97% of the purchase price.

Not Vested
GG

[CityFarmer]

Like I say its the poor macro outlook not the just the segment that YZJ is operating in. Overall, global O&G and shipbuilding industry is cyclical. China to me no longer has the competitive advantage in mfging across a broad segment and hence the need to resort to weakening of Chinese Yuan.

In addition, I remain puzzled over why YZJ is doing relatively well compared to other China based yards such as Cosco Pacific - really puzzled over the big picture.

Not Vested
GG

YZJ management has never denied the tough time for shipbuilding.

I reckon there might be two reasons

- The company has an alternative source of revenue i.e. Investment. It has allowed choices, the choices on margin over sales. It has also allowed the company to reject contracts without sufficient down-payment. The shipbuilding revenue and segment profit in FY2014, was 80% and 65% of the peak year in FY2011 (Source: Segment Info in ARs). Keppel Corp is doing the same, diversification. The Keppel land will provide alternative revenue source, for the O&G segment, right?

- The company financial strength has given shipowners, as well the financial institutions the confidence on deliveries and financial supports. Good contracts have gone to YZJ, rather than to other shaky shipbuilders.

(sharing few points on the company)

YZJ is a company that will survive. Its a chosen vehicle by the Central to focus on a certain segment of the ship building sector.

However, one must differentiate between unsystematic and systematic risks. YZJ is trying to be an efficient builder but the bigger over riding concern remains the downturn of the O&G sector and its spillover impact on the entire global industry.

Financing ship owners in order to bag contracts is also a dangerous thing and it is almost equivalent to buying contracts. Such an act in my opinion happens when industry conditions are not favourable that financial institutions are not willing to finance ship owners forcing them to turn to builders.

Contrast this to SSC's purchase of RoRo where Japanese govt backed financial institution finance 97% of the purchase price.

Not Vested
GG

The present adversity, isn't structural, but cyclical in nature. In other words, it will not last forever. IMO, it should be at the bottom of the cycle, but I am not sure the recovery timing.

The financing I was referring, is the China gov support in shipbuilding sector, isn't from the company. It should be similar in nature as SSC case.

(vested)

[CityFarmer]

The company will be included into STI on Sept 21. The demand will increase, due to re-balancing of passive funds. I am glad M1 is now in the reserve list. 

Time to pick up those out from the index in the coming "sales"?

Congratulate to the fellow shareholders

(vested in both YZJ and M1)

STI: UOL, Yangzijiang and SATS in; Jardine Matheson, Jardine Strategic and Olam out

SINGAPORE (Sept 3): UOL Group, Yangzijiang Shipbuilding Holdings and SATS will replace Jardine Matheson Holdings, Jardine Strategic Holdings and Olam International as constituents of the Straits Times Index following the conclusion of the semi-annual review, says SPH, SGX and FTSE Russell.

The change was made in response to a recent market consultation which showed strong support for the introduction of an enhanced liquidity rule for the STI beginning with this review, says the three companies in a joint statement.

The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) CapitaLand Commercial Trust, Singapore Post Ltd, Suntec REIT, Keppel REIT and M1.

Companies on the reserve list will replace any constituents that become ineligible as a result of corporate actions, before the next review.

All changes from this review will take effect from the start of trading on Sept 21. The next review is scheduled for Dec 3.
http://www.theedgemarkets.com/sg/article...d-olam-out

[greengiraffe]

The company will be included into STI on Sept 21. The demand will increase, due to re-balancing of passive funds. I am glad M1 is now in the reserve list. 

Time to pick up those out from the index in the coming "sales"?

Congratulate to the fellow shareholders

(vested in both YZJ and M1)

STI: UOL, Yangzijiang and SATS in; Jardine Matheson, Jardine Strategic and Olam out

SINGAPORE (Sept 3): UOL Group, Yangzijiang Shipbuilding Holdings and SATS will replace Jardine Matheson Holdings, Jardine Strategic Holdings and Olam International as constituents of the Straits Times Index following the conclusion of the semi-annual review, says SPH, SGX and FTSE Russell.

The change was made in response to a recent market consultation which showed strong support for the introduction of an enhanced liquidity rule for the STI beginning with this review, says the three companies in a joint statement.

The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) CapitaLand Commercial Trust, Singapore Post Ltd, Suntec REIT, Keppel REIT and M1.

Companies on the reserve list will replace any constituents that become ineligible as a result of corporate actions, before the next review.

All changes from this review will take effect from the start of trading on Sept 21. The next review is scheduled for Dec 3.
http://www.theedgemarkets.com/sg/article...d-olam-out

I don't think it really matters as SGX appears to be off the radar of many global institutional funds already.

The Hongs removal will help eliminate the rigging of the index via JMH and JSH leaving JC&C as the primary high price vehicle. Fundamentally, JC&C forms a big core of JSH earnings which feeds thru to JMH and hence the removal makes sense.

Olam of course is a forgotten Temasek cornered historical darlings.

UOL is a quality prop counter that should grow over time, YZJ - I remain a bear for the marine sector globally and SATS appears to be an unique play on regional air transport support.

Vested in None as Core
GG

[CityFarmer]

Official update from the company on the STI inclusion.

http://infopub.sgx.com/FileOpen/YZJ%20Pr...eID=368562

[corydorus]

This is good news and a surprise that STI plan to include a ship builder at a time where the industry is in tough territory.
They probably see a good future in it.

[desmondxyz]

http://www.seatrade-maritime.com/news/as...jiang.html

China to have 30 shipbuilders with no more than 60m dwt yard capacity: Yangzijiang

By Lee Hong Liang from Singapore

China’s shipbuilding industry is expected to be left with a handful of 30 shipbuilding enterprises with demand for yard facilities not exceeding 60m dwt by end-2015, according to Ren Yuanlin, executive chairman of Yangzijiang Shipbuilding.

Ren, who was speaking to the local media, said that such a demand level spread among 30 shipbuilders is a “reasonable projection”, or even a “conservative estimate”.

At its peak, China’s shipbuilding sector witnessed more than 3,000 shipyards at the start of 2010, leading to a severe yard capacity glut and sending thousands of yards out of business as newbuilding orders plunged.

In the first nine months of 2015, Chinese shipyards received newbuilding orders with tonnage amounting to 18.16m dwt, a fall of 65.4% compared to the same period of 2014, according to figures from China Association of the National Shipbuilding Industry (Cansi).

Today, there are less than 100 yards, including state-owned enterprises, with active day-today operations, Ren noted.

He also pointed out that China’s shipbuilding industry is going through its worse five-year period based on Beijing’s 12th Five-Year Plan (2011-2015), the blueprint for long term social and economic development policies.

The big state-owned shipbuilders, namely China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp (CSIC), will likely survive the industry recession with financial backing from government.

Among the privately-owned yards, Yangzijiang has come out tops for making the right turns and decisions amid the crisis, thanks to its shrewd leader Ren. Sinopacific Shipbuilding Group, known for its inhouse designed bulkers and OSVs, ran into cash flow problems after the crash of oil prices and the prolonged dry bulk shipping slump, impacting its newbuilding sales.

Another once-leading privately-owned yard China Huarong Energy Company, previously and better known as China Rongsheng Heavy Industries, continues to struggle with debts and ongoing talks with its creditors. The shipbuilder with huge yard facilities is now literally a ‘ghost yard’, where operations have ceased as funds dried up.

At last count over the course of this year, close to 10 privately-owned Chinese yards apread across the provinces of Jiangsu, Zhejiang, Liaoning and Shandong have either filed for restructuring or declared bankrupt.

“China’s shipbuilding industry is going through a major reshuffling and a painful phase of consolidation, but it is also gaining strength during this critical period,” Ren was quoted saying.

Published inAsia, Shipbuilding & Shipyards

[greengiraffe]

http://www.seatrade-maritime.com/news/as...jiang.html

China to have 30 shipbuilders with no more than 60m dwt yard capacity: Yangzijiang

By Lee Hong Liang from Singapore

China’s shipbuilding industry is expected to be left with a handful of 30 shipbuilding enterprises with demand for yard facilities not exceeding 60m dwt by end-2015, according to Ren Yuanlin, executive chairman of Yangzijiang Shipbuilding.

Ren, who was speaking to the local media, said that such a demand level spread among 30 shipbuilders is a “reasonable projection”, or even a “conservative estimate”.

At its peak, China’s shipbuilding sector witnessed more than 3,000 shipyards at the start of 2010, leading to a severe yard capacity glut and sending thousands of yards out of business as newbuilding orders plunged.

In the first nine months of 2015, Chinese shipyards received newbuilding orders with tonnage amounting to 18.16m dwt, a fall of 65.4% compared to the same period of 2014, according to figures from China Association of the National Shipbuilding Industry (Cansi).

Today, there are less than 100 yards, including state-owned enterprises, with active day-today operations, Ren noted.

He also pointed out that China’s shipbuilding industry is going through its worse five-year period based on Beijing’s 12th Five-Year Plan (2011-2015), the blueprint for long term social and economic development policies.

The big state-owned shipbuilders, namely China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp (CSIC), will likely survive the industry recession with financial backing from government.

Among the privately-owned yards, Yangzijiang has come out tops for making the right turns and decisions amid the crisis, thanks to its shrewd leader Ren. Sinopacific Shipbuilding Group, known for its inhouse designed bulkers and OSVs, ran into cash flow problems after the crash of oil prices and the prolonged dry bulk shipping slump, impacting its newbuilding sales.

Another once-leading privately-owned yard China Huarong Energy Company, previously and better known as China Rongsheng Heavy Industries, continues to struggle with debts and ongoing talks with its creditors. The shipbuilder with huge yard facilities is now literally a ‘ghost yard’, where operations have ceased as funds dried up.

At last count over the course of this year, close to 10 privately-owned Chinese yards apread across the provinces of Jiangsu, Zhejiang, Liaoning and Shandong have either filed for restructuring or declared bankrupt.

“China’s shipbuilding industry is going through a major reshuffling and a painful phase of consolidation, but it is also gaining strength during this critical period,” Ren was quoted saying.

Published inAsia, Shipbuilding & Shipyards

Shipbuilding is part of the global industry.

China will not be spared.

If one reads correctly, even a survivor will have its fair share of pains until the upturn materialised.

YZJ will be amongst the suvivor... No doubts about it.

However, the ability to sustain profitability have to be carefully reviewed.

Not Vested
GG

[CityFarmer]

Be a survival, and remains in a good shape, in a down-cycle, is the precursor, of many good years ahead in up cycle, right?

I reckon, nobody doubt, the company will survive and remain in good, if not better shape amid the current storm. Let's see how it perform, after the storm. 

(vested as core investment)