Yangzijiang

Yangzijiang

Postby winston » Thu May 22, 2008 2:50 pm

From DBS:-

Solid management

Story: Yangzijiang (“YZJ”) is the largest private containership builder in China and ranked among the top ten globally.

Point: YZJ’s orderbook stands at US$6.8bn, with completion stretches up to 2011. Management expects new orders to halve from US$5.0bn to US$2.2bn this year.

YZJ’s overall risk management and execution have been impressive thus far. The Group is expected to squeeze in four additional vessel deliveries in 2009 on the back of improved efficiency and resultant higher productivity at its new yard.

This would help to bolster its profit margins next year, as these vessels were priced at over a 30%
premium because of the shorter lead-time. The Group has also done a great job in managing RMB
appreciation, evidenced by the net forex gains reported since 2006.

Relevance: Unfortunately, the outlook for shipbuilding industry is murky. Shipbuilders are facing tough times ahead amidst strengthening RMB against USD and rising steel prices. While we believe YZJ is proactive in currency hedging, the execution of its record high order backlog remains a concern.

With 30% of YZJ’s order book exposed to forex fluctuations and the risk of high steel prices affecting its earnings from 2H09 onwards, the risk to forecasts is high beyond 2009.

Maintain Hold and fair value of S$1.45, still pegged to 14x FY09F PE.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby winston » Wed May 28, 2008 5:11 pm

Not vested anymore.

From OCBC:-

Price breakout below key support

- Yanzijiang has been trading within an upwards trending channel since Mar.

- However, the price broke below the lower band of the trend channel 3 trading sessions ago on the back of high volume. This indicates that the price has potential to go lower in the days ahead.

- The downwards trending MACD supports our view that Yangzijiang is downside biased.

- But given the oversold nature of the short-term stochastic indicator, we expect Yangzijiang to rebound to test the resistance around S$1.05 at the lower band of the trend channel before it resumes its drop.

- The resumption of the price drop could take Yangzijiang to its support at S$0.80. This level is the historical low formed on 20 Mar. Resistance is set at S$1.20, the recent high formed on 7 May.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby winston » Tue Jun 03, 2008 9:33 am

03-06-2008 10:34:27

Singapore Hot Stocks-Yangzijiang rises on shipbuilding deals

SINGAPORE, June 3 (Reuters) - Yangzijiang Shipbuilding rose as much as 2.6 percent to S$0.99, with over 13 million shares traded, a day after the Chinese firm won 12 orders worth $514.4 million to build various vessels.

"Near-term, the contracts have no impact on the company.

However, the market is still concerned with rising steel prices and RMB appreciation," said Hubert Tang, UBS analyst who covers Yangzijiang.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby winston » Wed Jun 25, 2008 10:15 am

Not vested anymore. From DBS:-

Avoid pure Chinese shipyards Yangzijiang and JES. Chinese steelmakers have agreed to pay Anglo-Australian mine Rio Tinto up to 96.5% more for their ore supplies this year, the largest ever annual increase and well over the 9.5% increase paid last year.

The rise is significantly higher than the 65 –71% price increase for Brazilian iron ores and surpasses the record increase of 71.5% agreed in 2005.

This move is likely to further fuel inflation worries and boost the cost of ships, cars, machineries and other products.

DBS Research reiterates that Chinese yards have yet to feel the full impact of the annual increase in prices of coking coal and iron ore Y-T-D.

Chinese shipyards Yangzijiang and JES will need to grabble with margin pressures. Cosco’s shipbuilding activities account for 30% of revenue while its bigger ship repair and offshore construction activities accounts for a larger share.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby winston » Tue Jul 01, 2008 7:08 pm

Yangzijiang Shipbuilding
June 30 close: $0.85
HSBC Global Research, June 27

MODERATING container ship outlook, but secured revenue growth: Global container ship delivery until 2010 should exceed the average 10 per cent y-o-y global container trade growth. Ship owners could withhold order placement on any softening of time charter and container ship freight rates, unless demand growth accelerates over the next two years. Yangzijiang's full backlog and new capacity should, however, secure impressive revenue growth (70-85 per cent over 2008-09 estimated).

Operating margins under pressure due to limited pricing power:
We expect operating margins to flatten or decline in 2008 and 2009. Limited pricing power from ships will be delivered in 2008 and 2009, more bulk carrier deliveries, better operating leverage from increased volumes at the new shipyard, and efficiency gains are unlikely to offset rising steel costs (up 20-25 per cent y-o-y), in our opinion.

Panamax container ship (80 per cent of revenues and 50 per cent of order book) prices increased at a slower pace than bulk carriers (20 per cent of revenue). We expect 2008 operating margin to be essentially flat y-o-y and down 50 basis points in 2009.

Initiate at 'neutral' and $1.05 TP:
Our proprietary market assessed cost of capital (MACC) valuation implies the stock is trading at a discount to sector average. Our TP of $1.05 is based on long-term adjusted cash returns on invested capital of 11.5 per cent, MACC of 16.6 per cent, PE of 7.8 times, and enterprise value/Ebitda of 4.9 times our 2009 EPS forecast. Given the moderating container ship market, we think Yangzijiang should trade at a discount to its peers.
NEUTRAL
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby helios » Tue Jul 01, 2008 10:06 pm

yo,

i went to dig out @ our CanSlim thread; MM did a wonderful example (YZJ) to demostrate on e "I" perspective.

here's e link:
viewtopic.php?f=16&t=262&st=0&sk=t&sd=a&start=20

ironically, i was chatting w my broker on YZJ over e phone yesterday ...
[Finance disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought regarding investing of any stocks/ funds and/or whatsoever. The author has no vested interest in the mentioned stock at the time of writing.
helios
Permanent Loafer
 
Posts: 3627
Joined: Wed May 07, 2008 8:30 am

Re: Yangzijiang

Postby winston » Wed Jul 02, 2008 9:17 pm

July 2, 2008, 6.39 pm (Singapore time)

Yangzijiang wins US$226.94 mln in deals in June

Yangzijiang Shipbuilding (Holdings) Ltd said it had secured shipbuilding contracts worth a total of US$226.94 million in June alone.

From January to June this year, the group has secured contracts worth a total of US$808.92 million.

Its current contracts on hand are worth US$7.35 billion, comprising US$4.84 billion in containerships and US$2.51 billion in bulk carriers.

-- BT Newsroom
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby Aspellian » Wed Jul 02, 2008 11:52 pm

raw material / high imported steel prices will impact the margins. revenue will be high, but profits may not grow as fast. Invest with care on this counter.

PROMISE, PASSION, PEACE, POWER, PURPOSE, PLAN, PATIENCE, PERSEVERANCE, PROTECTION
DELIGHT, DISCIPLINE, DILIGENT, DETERMINATION, DESIRE

"Its not whether you're right or wrong thats important, but how much money you make when you're right and how much you lose when you're wrong." - Warren Buffet
User avatar
Aspellian
Boss
 
Posts: 1919
Joined: Fri May 23, 2008 8:53 am

Re: Yangzijiang

Postby winston » Tue Jul 29, 2008 8:23 am

Not vested.

RESEARCH ALERT-UBS cuts Yangzijiang target, keeps buy rating

SINGAPORE, July 29 (Reuters) - UBS slashed its price target for Chinese ship builder Yangzijiang to S$1.30 from S$2.65, citing rising steel costs and a slowdown in new orders but kept its buy recommendation.

UBS said it expects Yangzijiang to report earnings per share of 0.44 yuan and 0.67 yuan in 2008 and 2009, respectively, down from the previous forecast of 0.46 yuan and 0.72 yuan.

"Despite our revisions, Yangzijiang's earnings growth is one of the highest among its peers, driven by timely new capacity addition and improvement in its product mix," UBS analyst Hubert Tang wrote in a report.

Yangzijiang closed at 78.5 Singapore cents on Monday.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108837
Joined: Wed May 07, 2008 9:28 am

Re: Yangzijiang

Postby purplecloud » Tue Aug 05, 2008 2:11 pm

Not vested .... perhaps YZJ crumples due to report from CLSA ...... very high off loading volume now ......

The fourth-largest shipbuilding company in China, Singapore-listed Yangzijiang Shipbuilding faces rapid increases in steel and labour
costs, climbing tax rates and a falling US dollar. These factors will erode its 09CL net margin by 550bps. On top of this, an acquisition could dilute the share base by 10.6%. The stock is overvalued at 8.8x 09CL PE versus a global peer group average of 7x. With 20% implied downside to our S$0.64 target, we are initiating coverage with a SELL rating.

Losing momentum

New contract gains are set to drop to 50 in 2008 (US$2.1bn), versus 107 new contracts in 2007 (US$5bn). The company’s yards are almost full until 2011 and it is probably not keen to lock in prices four to five years ahead of time. Also, shipowners are less likely to put in additional orders for newbuilds at this point, since they face tighter credit and fear a slowdown in charter rates due to the high number of newbuilds entering the market.

Unexpected costs

The higher-than-expected 60% hike in steel prices YTD will put significant pressure on Yangzijiang’s margins as it has only built in a 20% increase for the year. Moreover, labour shortages will continue to push up wages, probably beyond the 10% rise the firm expected. This, combined with a weakening US dollar and the end of tax breaks, will squeeze net margins by 350bps in 08CL and 550bps in 09CL. If labour costs and steel prices expand by 10% more while the US dollar weakens by 10% less than we have built in, our 2009 netprofit
estimate would drop by 52%.

Margin pressure

Yangzijiang believes that the higher vessel prices it obtained recently will help it absorb the increasing raw-material costs. However, it obtained the highest prices for those with early-delivery guarantees, which will only help alleviate some of the 09CL margin pressure. Moreover, in the current economic environment, and with its yards filled for the next three years, the company is unlikely to add additional orders for early delivery.


Expensive valuation

The stock is overvalued at 8.8x 09CL, versus the global shipbuilding average of 7x. Consensus has not properly priced in the margin-erosion risk; Yangzijiang deserves to trade in line with its global peers because it is a pure shipbuilder facing the same demand and cost pressures. At 7x 09CL PE, our S$0.64 target is supported by a DCF valuation and implies 20% downside.
User avatar
purplecloud
Coolie
 
Posts: 159
Joined: Fri Jun 20, 2008 8:48 am

Next

Return to U to Z

Who is online

Users browsing this forum: No registered users and 2 guests

cron