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Cruising with the ship ..Yangzijiang
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darkknight
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03-Mar-2014 22:32
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Shipbuilding profitability is predictable since the fate is locked down by 2 - 3 years ago order intakes. So 2014 will be worst, but management believe 2015 will be better against 2014, when its property venture churn in the profit. As it is venturing into offshore market by discounting the rig's price, will therefore need to consider that high revenue will not equate to same profitability moving forward. Yzj has good track record, so it might play out to be another Keppel Corp in 5 years, and that could be a multiple time return in stock value. nothing is guaranteed of course, Cosco did not make much profit after going into offshore market and stock went from $1.8 to $0.7 within last 3 years. However Yangzijiang has good NAV and is generating the cash flow to subsidise dividend pay out. So $0.9, its net asset per share could be one indication of when to re-enter this stock. just my personal view.
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oldflyingfox
Master |
03-Mar-2014 22:29
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difficult year for business does not always mean difficult year for it's share price. Share price always look ahead. | ||||
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darkknight
Member |
03-Mar-2014 22:17
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it means that 2014 performance will definitely be lower than 2013. I believe there should be opportunities to accumulate this stock at a much lower price in the next few quarters. Eventually it should reach the $1.6 projection by 2016, as per the warrant expiry date. Will avoid the stock for now, despite being positive Yzj will do well in 3 years time.
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ascend88
Master |
03-Mar-2014 14:49
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means.....bottoming out ...bottomed !
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moneycow
Elite |
03-Mar-2014 14:45
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Management said - 2014 would be the most difficult year ? ONLY 2015 will see better ? I don't get this........ |
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WanSiTong
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02-Mar-2014 21:33
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YANGZIJIANG: FY2013 gross margins widened in shipbuilding slump This article is republished with permission from NextInsight. 02-Mar  Yangzijiang's FY2013 gross margin widened, but its net margin dipped due to the expiry of the preferential tax status of its main yard, New Yangzi. This tax status is to be renewed this May. Company photoEVEN THOUGH China is the world's largest builder of sea transportation vessels with a 40% market share, only about 4% of PRC yards secured new contracts last year and about half are expected to go bust this year, according to industry estimates.  'The margin generated by our maiden jackup oilrig will be less than for our containerships. There is a tuition fee that we are willing to pay for being a new kid on the block,' said executive chairman Ren Yuanlin. Company photoHe believes offshore engineering is an area China must venture into in spite of the difficulties of breaking into this market. In spite of the tough environment, Yangzijiang Shipbuilding managed to achieve total revenue of Rmb 14.3 billion in FY2013, down a mere 3% year-on-year. Revenue from the shipbuilding related segment declined 4.9% to Rmb 12.8 billion (89.5% of topline) as it delivered 34 vessels compared to 51 vessels in FY2012. The impact of the lower shipbuilding revenue was offset by a 14.9% rise in income from financial investments to Rmb 1.5 billion (10.5% of topline). FY2013 gross margin was up 2.3 percentage points at 33.2%, thanks to its successful foray into the trading of steel and scrap metal, which began to contribute significantly in 4Q2013. It also lowered financing costs by 44% through its successful negotiation for lower borrowing costs. However, its net margin dipped 2.6 percentage points to 21.6% due to an increase in the corporate tax rate paid by its main yard, New Yangzi. From 15%, the subsidiary's tax rate jumped to 25% in FY2013 upon the expiry of its preferential corporate tax status for high tech companies. The company is renewing its preferential corporate tax status in May and expects to adjust its tax rate back to 15%. Net profit attributable to shareholders was Rmb 3.1 billion, down 14% year-on-year. Shipbuilding to recover next year " This year will be the worst in the current shipbuilding downcycle," cautioned Yangzijiang executive chairman Ren Yuanlin at the company's FY2013 results briefing yesterday (Feb 27). The downcycle began in 2010 after the shipbuilding boom of 2008 to 2009 resulted in a vessel supply glut. As it takes about 2 years to construct a vessel, it follows that the excess capacity of under-utilized yards back in 2011 and 2012 will become stark this year.  'We want to build the semi-submersible oilrig that is suitable for median water depth because few yards offer this design, which is cheaper compared to a deepwater vessel,' said CFO Liu Hua. NextInsight file photo'The mid-water vessel also has the advantage of being upgradable into a deep water vessel because of similarities in the two types of vessels.' The good news is, he expects Yangzijiang's shipbuilding output (volume) to grow as much as 80% year-on-year in 2015. The Group's outstanding order book has increased to US$4.6 billion for 111 vessels (containerships and bulk carriers) as at 27 February, compared to US$3.4 billion a year ago. Its customers also have outstanding options to exercise rights to build another 11 such vessels at total contract value of US$830 million. Foray into offshore engineering Yangzijiang secured its maiden jack-up rig contract at the end of 2012 and construction on this project is progressing according to schedule. It recently entered into a contract to build 2 semi-submersible rigs for US$825 million, including options for 2 additional similar units. The contract will only be effective when the Group receives the deposit for the rigs. " We identified an oilrig designed for median depth seabed as the product we want to offer. It is similar to deep water vessels, with higher steel usage and simpler design," said Mr Ren. " We do not intend to compete against Singapore rig builders in the shallow water space and we do not intend to compete against the South Koreans in the deep water space. " From a steel usage viewpoint, China has a competitive advantage in building oilrigs of such a design."  FY2014 will be the most difficult year in this shipbuilding downcycle with a dearth of revenue from vessel deliveries because very few newbuilding orders were placed in 2011 and 2012. The year-on-year surge in order book in 2013 will translate into a surge in 2015 earnings.Foray into property development The Group is going into property development for supplementary revenue that will buffer an earnings contraction during shipbuilding down cycles. It forayed into property development in 2012 through a joint venture with the Huaxi Group. It is redeveloping the former yard space at its headquarters in Jiangyin into a commercial and residential district. On 27 February, it announced its acquisition of a small property developer (Jiangsu Hengyuan Real Estate Development) at book value of Rmb 300 million. " Acquiring a property company will give us the manpower expertise to run our property development projects independently," said Mr Ren. " Property development has synergies with the Group. " Many of our financial investments customers put up real estate as collateral, which will be foreclosed and redesignated as our property development landbank in the event of a credit default. In such foreclosures, our landbank cost will be relatively low as collateral is valued at a fraction of the borrower's land acquisition price. " The municipal government controls land allocation rights. As one of its top contributors of tax revenue, Yangzijiang will be favored when tendering for land redevelopment projects."  Yangzijiang has 6 yards strategically located along the Yangtze River with annual capacity to build 7.5 million metric tons (MT) of new vessels, fabricate up to 120,000 MT of steel and demolish up to 300,000 MT of vessels. |
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WanSiTong
Supreme |
02-Mar-2014 21:31
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spore1
Supreme |
28-Feb-2014 22:45
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yzj is on a neutral mode
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moneycow
Elite |
28-Feb-2014 18:02
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What happen to the billion dollar contract ? Is it shortlist keep selling down ? 5 cents divident also never move :) | ||||
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tanlp13
Member |
28-Feb-2014 11:15
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hello... juz load few lots last two day in price1.145... :) | ||||
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oldflyingfox
Master |
28-Feb-2014 10:30
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http://www.warrants.com.sg/cgi/newsletter/todays_highlight.cgi?action=email& uid=284%20 | ||||
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ascend88
Master |
27-Feb-2014 20:16
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Dividend is good ... Outlook and future plan is good ... Hold long long like WB ... And load if got crazy sale price ... :)
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Oldbird
Master |
27-Feb-2014 17:57
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Ascend , you are the expert in this field..Plan to collect my second dividend n hold long ....long
Cheers friend. DYODD
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springpig
Member |
27-Feb-2014 15:12
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Let's see whether shortists will be trapped again like last time(early dec 2013)... | ||||
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ascend88
Master |
27-Feb-2014 14:32
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OUTLOOK/ FUTURE PLANS The Group delivered 34 vessels in FY2013, out of which 6 vessels were delivered in 4Q2013. In February 2014, the Group added yet another milestone to its strong track record with the successful sea trial for its first 10,000 TEU containership. Since 13 November 2013, the Group has further secured US$511.0 million in shipbuilding orders for 14 vessels. These comprise of 2 units of 36,000 DWT bulk carriers, 3 units of 64,000 DWT bulk carriers, 3 units of 82,000 DWT bulk carriers, 3 units of 208,000 DWT bulk carriers, 2 units of 1,100 TEU containerships, and 1 unit of 10,000 TEU containership. With these new orders, the Group?s outstanding order book increased to US$4.6 billion for 111 vessels as at the date of announcement, with 11 outstanding options worth US$0.83 billion. Of these, 8 outstanding options are for containerships worth US$0.72 billion, while the remaining 3 options are for bulk carriers amounting to US$0.11 billion. The Group has made substantial progress in its offshore segment, having signed a contract to build 2 semi-submersible rigs for US$825 million, with options for 2 additional similar units. However, the contract has not been made effective pending the receipt of down payment. Construction of the Group?s jack-up rig is progressing according to schedule. The Group has identified 5 business segments, which will strengthen its core expertise in commercial shipbuilding and extend its capability into the offshore oil and gas sector. In addition, the Group has taken into consideration the need to protect shareholders? interest during industry downturns, and has taken measures to maximize returns through investments in held to maturity assets, property development, and complementary businesses such as trading, shipping, and ship demolition. The Board remains confident of the Group?s financial performance for the year 2014. |
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ascend88
Master |
27-Feb-2014 14:30
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" 2013 has been another grueling year for the commercial shipbuilding industry in China, with many yards struggling with severe overcapacity and a dearth of new orders. Yangzijiang has managed to remain resilient through this challenging environment due to our practice of delivering quality vessels, strong risk management, and maintaining sound financial position. I am encouraged to see that the order momentum has continued into the new financial year. With the strong outstanding order book, our shipyards will remain highly utilized until 2016. Nevertheless, the management of Yangzijiang will be reviewing various methods to increase production efficiency and capacity using our existing infrastructure to enhance earnings. I am also happy that our offshore segment has been given the opportunity to establish a stronger presence in the offshore oil and gas industry. Going forward, the Group?s strategy is to focus on selected key products to swiftly build up expertise, and derive healthy returns through economies of scale. We believe that the Moss CS50 non-DP semi submersible drilling rig is a cost effective design for medium to deep water oil and gas exploration. Yangzijiang has been involved in numerous bidding processes, but we will only undertake projects that suit our strict risk and return profile. In 2013, we have identified 5 business segments to strengthen the Yangzijiang group as a whole. We will strive to achieve growth in each of these segments in order to achieve an optimum balance of growth drivers, strong profitability, and robust financial position. As a gesture of thanks to our loyal shareholders, it is my pleasure to announce on behalf of the board of directors that we have maintained the dividend of 5 Singapore cents per share. We hope for your continued support as we grow and evolve into a stronger, more diversified organization." Mr Ren Yuanlin (任 元 林 ), Executive Chairman, Yangzijiang |
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WanSiTong
Supreme |
27-Feb-2014 13:02
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Yangzijiang - Good execution, good results Written By Stock Fanatic on Thursday, February 27, 2014 ■ FY13 headline profit in line impressive margins in 4Q, offset by higher tax■ Secured US$511m of new contracts orderbook lifted to US$4.6bn ■ Final DPS of 5 Scents declared, translating to 4% yield ■ Maintain BUY TP of S$1.33 implies potential total return of 22% Highlights Pretax profit above expectations. Yangzjiang registered strong EBIT in 4Q, rising 45% y-o-y and 29% q-o-q, on the back of record gross margins of 42%. This was offset by the high tax rate of 46% in the quarter. As a result, net profit was in line at Rmb746m (-8% y-o-y -9% q-o-q). We believe the strong margins were attributable to the delivery of the last batch of high margin pre-crisis orders. Secured US$511m contracts, comprising 2 units of 36k dwt bulkers, 3 units of 64k dwt bulkers, 3 units of 82k dwt bulkers, 3 units of 208k dwt bulkers, 2 units of 1.1k TEU containerships and 1 unit of 10k TEU containership. Our View Orderbook trending up. Second consecutive quarter of orderbook growth is commendable, rising from US$3.87bn three months ago to US$4.6bn as of end Dec, signifying the end of its orderbook decline since 1Q12. This translates to a healthy 2.7x book to bill ratio. With 11options worth US$0.83bn on hand and favourable shipping dynamics, we expect more contracts to be finalised in the near future. As the new yard is full till 2016, Yangzijiang intends to recommence the Changbo yard in 1Q14, which will be able to take on an additional 6-7 small-medium sized vessels for delivery by 2015. This could lift FY14 revenue by about 5%. Semi-submersible contracts in the bag? Upstream reported at end Jan that Yangzijiang has bagged 2+2 semi-submersible drilling rigs contracts, to be built to Moss CS50 design. If effective, this will be Yangzijiang's second rig deal. Positives of this deal: 1) Estimated contract value of US$1.7bn would be a boost to orderbook 2) We can expect economies of scale from the 2+2 orders for similar designs and 3) customer PrimePoint is an established drilling company. However, although Yangzijiang has demonstrated an impressive track record in shipbuilding, skepticism could remain until Yangzijiang delivers its first jackup on time and on budget by Aug 2015. Technical Analysis
Recommendation Reiterate BUY on the most competitive and profitable listed shipbuilder in China. At current 1.1x P/BV, earnings and margin downtrend in the next two years are largely priced in. We believe investors should look beyond near term earnings, to order win momentum and quality alongside the shipping recovery. Yangzijiang remains our preferred pick to play the shipbuilding recovery given its excellent track record, reputable management, and balance sheet strength. We maintain our SOTP-based TP of S$1.33. (Read Report) |
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oldflyingfox
Master |
27-Feb-2014 11:03
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Yap, the share price is lagging behind. By right, it should move up 5cts after declared dividend. | ||||
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Oldbird
Master |
27-Feb-2014 10:49
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The 5￠ dividend policy will always support the share price. Credit should be given to the management/ directors for being able to deliver relative good results under severe shipping/ ship building industry down turn!
Vested do your own DD
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shadow
Veteran |
27-Feb-2014 10:02
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Yangzijiang Shipbuilding (YZJ) reported a 5% YoY fall in its 4Q13 revenue to RMB3.38b and a 8% decrease in PATMI to RMB746.3m, such that FY13 revenue and PATMI declined by 3% and 14% to RMB14.3b and RMB3.10b, respectively. This was within our expectations, as PATMI came in 2% above our FY13 forecast. A first and final DPS of 5 S cents was declared, similar to FY12, and translates into a yield of 4.4%. Looking ahead, YZJ has begun to grow its fleet of vessels owned by the Shipping Logistics and Chartering segment as it sees an improving outlook for the commercial shipping market. We will provide more details after an analyst briefing scheduled later. For now, we place our Hold rating and S$1.22 fair value estimate under review. Source: OCBC Research - 27 Feb 2014 |
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