Yangzijiang Shipbuilding: Healthy order flow for replenishment. - OCBC 3-Oct-13. Summary: Yangzijiang Shipbuilding (YZJ) has recently secured 17 contracts worth about US$871m, bringing total orders won YTD to US$2.096b. These new contracts are scheduled for deliveries in 2015-2016, and provide much-anticipated replenishment of the order book for execution of orders further down the road. Newbuild prices for bulk carriers in Chinese yards have been on a slow but steady uptrend since early this year, but additional monitoring is needed to determine its sustainability, which is dependent on the global economic recovery, the rate of China’s yard consolidation process as well as any further tightening in China’s money supply. With a gradually recovering newbuild market, we raise our peg from 8x to 9x P/E, while rolling forward our valuations from blended FY13/14F earnings to FY14F earnings, resulting in a slight rise in YZJ’s fair value estimate to S$1.04 (prev. S$0.99). Maintain HOLD.
Posted on: Thu, 03 Oct 2013 06:43:08 +0000
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