by winston » Mon Sep 28, 2020 1:57 pm
DIVERSIFYING ITS PORTFOLIO
Flattish price performance since last report
Outstanding order book of US$2.6b
Looking to enter VLCC segment
Since our last HOLD-rated report on 4 May 2020, the share price of Yangzijiang Shipbuilding (YZJ) has posted flattish performance – the stock has been trading within the S$0.90 – S$1.05 range in the last few months and closed at S$0.98 on 25 September 2020, compared to the closing price of S$0.985 prior to our 4 May report.
In comparison, the broader market, as measured by the STI, was down ~6% over the same period.
The shipbuilding market has been challenging but the group has still managed to win some orders in 1H20, and is looking to enter the VLCC segment by acquiring a half-built unit as reported by TradeWinds.
If this is the case, it would be consistent with management’s previous comments that it seeks to grow its product portfolio and VLCC is one of the new areas of focus.
Meanwhile, low valuations of Chinese banks (YZJ also has a financing business) as well as a lacklustre shipbuilding market would weigh on the stock.
Source: OCBC
It's all about "how much you made when you were right" & "how little you lost when you were wrong"