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(09-05-2013, 10:49 AM)Greenrookie Wrote: [ -> ]Quite a number of updates:

http://www.yzjship.com/en_news.asp

Of particular interest is their progress in their building of 10000 TEUs container ships. They mentioned it passes 2 tests, when I search online about the tests ships must go throu before they commissioned, it threw a blank...

Maybe I am naive, but I like management that recognised workers' contributions, but only those insiders who really worked for YZJ know whether its just a PR exercise...

Yes, I like management that recognized workers' effort too. It is team work, only motivated team produces good result.

IMO, PR exercises involve press, not within company news.

Warrants' strike price adjusted to RMB 7.222 from RMB 7.617. It is approx S$1.4

http://info.sgx.com/webcoranncatth.nsf/V...20031F504/$file/Announcement_20130521.pdf?openelement

[attachment=483]

Reading the financials from latest quarter and I can see how the gross gearing 52.7%+ get reduced to 4.9% net gearing by the
"restricted cash" (held in designated bank accounts under the name of the Group as deposits for performance guarantees, letters of credits and borrowings.)

Anyone can comment on which gearing value to use? (i feel the restricted cash used to make net gearing look good)

and also if in scenario of liquidation would any amount/percent of restricted cash be returned to the company at all?

IMO, both debt/equity and net debt/equity are important measurements of debt. I use both of them, on top of others.

Slightly above 50% gross gearing is good for an asset intensive company. Net gearing is also as nice.

The restricted cash is a collateral of debt, so i doubt it will be returned to company if defaulted.

(22-05-2013, 09:57 AM)CityFarmer Wrote: [ -> ]IMO, both debt/equity and net debt/equity are important measurements of debt. I use both of them, on top of others.

Slightly above 50% gross gearing is good for an asset intensive company. Net gearing is also as nice.

The restricted cash is a collateral of debt, so i doubt it will be returned to company if defaulted.

I also use debt/ current assets, as well as ratio of fixed charges over earnings (av.)

For a capital intensive business, YZJ gearing is ok, whatever ways you look at it. Cash will not be "devaluated" so its the most secured form of collateral, and there is no need to further "discount" it. btw cosco do not separate their cash into restricted, marco polo separated it to fixed deposit, so it shows the prudence of YZJ managment

There only time there might be problems with their gearing is when their HTM goes sour, therefore there should be close tracking of HTM impairment levels.

2 cents worth(vested)

(22-05-2013, 11:42 AM)Greenrookie Wrote: [ -> ]

(22-05-2013, 09:57 AM)CityFarmer Wrote: [ -> ]IMO, both debt/equity and net debt/equity are important measurements of debt. I use both of them, on top of others.

Slightly above 50% gross gearing is good for an asset intensive company. Net gearing is also as nice.

The restricted cash is a collateral of debt, so i doubt it will be returned to company if defaulted.

I also use debt/ current assets, as well as ratio of fixed charges over earnings (av.)

For a capital intensive business, YZJ gearing is ok, whatever ways you look at it. Cash will not be "devaluated" so its the most secured form of collateral, and there is no need to further "discount" it. btw cosco do not separate their cash into restricted, marco polo separated it to fixed deposit, so it shows the prudence of YZJ managment

There only time there might be problems with their gearing is when their HTM goes sour, therefore there should be close tracking of HTM impairment levels.

2 cents worth(vested)

Agree on the need to closely tracking of HTM

Feeling good for the credit of 5 cents dividend to account yesterday.

(vested)

Hi, was reading up on YZJ major customers, just to share some info (Clear my thoughts)

Rickmers:
1) Issue bond in 2012, plan to expand and own more fleet from 2013 onwards. Focus is on MPC and container TEU >5000.
My thoughts: They have already made some recent acquisitions of 13000 TEU in the 2010-2011, while the potential to expand and make new orders is high, YZJ might not be a direct beneficiary, since the >10000 TEUs orders are already made recently and YZJ niche is in the 4250 and 4800 TEUs.

PD:
Have a LOA for 10 10000Teus containers, the LOA is signed in 2011 July, and there have been no news since then, but I felt its not a doom deal yet, given the >10000 Teus containers are built by PD prior to the deal.

Carisbrooke:
YZJ almost have a monpoly of bulk carrier built for this company in recent years.

Seaspan:
Orders of 11 confirmed and option for another 14. Seaspan has the first right of refusal from GCI, which plan to spend 5 billion on ship building contracts with 900 million earmark for the next 5 years.

Reederei Horst Zeppenfeld GmbH & Co. KG:
Dun know what the hell happen to this company, they only have 1 container ship left in business (Built by YZJ), they claim they have sold their ships when the second hand market is very good, and is looking to rebuilt their fleet, but I decided to write this company off.

My thoughts:
Only Seaspan and Rickermers are listed and hence have annual reports for scrunity, both are doing well (Profitable, growing from 2011), rickermers do not see prospects of any turnarounds in the next 2 years. But both see future prospects in green and big (eco-friendly, economy of scale), in line with what YZJ is planning to do.

When I research further to its korea competitors like HHI and Samsung, YZJ look like mickey mouse in terms of order book of ships. YZJ competitors are korean not chinese... Now I see the rationale for the PRc to consolidate the shipyards, otherwise, how are thy going to compete with Koreans ... YZJ customer base is also very concentrated ... They need to further expand. The 10000 TEU containers ship will be a make or break deal.

http://www.businesstimes.com.sg/premium/...s-20130606

Anyone knows the impact of these on ship builders like YZJ?

INitally, thought it will benefit the builders of eco-ships, but realized the eco-ships are mainly about energy efficiency design. From what I read, it has nothing to do with ballast fitting technology.

But the good things is, YZJ eco-ships that are delivered to carisbrook did receive a glowing report from GL, organization that gave EEDI certification.

quote from http://www.carisbrookeshipping.net/newsa...ID=240&src=:
“At GL we see the EEDI as a powerful driver of innovation within the maritime industry, both in terms of shipyards and designers focusing more on energy efficiency and taking advantage of new computational tools and ship owners who now have a clear guide to rely on in ordering new ships,” said Dr Pierre C. Sames, SVP Research and Rule Development of GL Maritime Services. “Our calculations show that these new vessels are some 30% below the reference EEDI line, which is a reflection of the commitment that Carisbrooke has made to invest in an extremely efficient vessel.”

And YZJ build that, there are some comments online that chinese yards claim of energy efficiency level are scam, that should put that to rest.

ALthough I am not sure how the green rules will affect the shipyards, my guess is:

Possible goods:
1) The smaller players(esp PRC players) with no track in building prowess will be phase out or forced to merged, and reduce competition within china.

Possible bad:
1) Given that shipping companies are not actually in the pink of health, margin of new orders will be squeeze further with these new orders.

Another thought on my mind:
YZJ is competing head on with the korea shipyards, with the move to build big and energy efficient ships, while there is no doubt there is where the biggest pie is, does YZJ has a niche or cost advantage over the korea shipyards? Not just western shipping companies are choosing korea ship yards over china ship yards, but also Chinese shipping companies are doing the same!! hmm... chinese shipyard reputation must stink quite a bit

With the tightness of fund in China, the risk of Yangzijiang's HTM financial assets will surface again. How safe is those financial assets and can those assets be redeemed at par when it matures?

If you really think about it, it is part of the shadow banking system everyone worries about China.

YZJ can buy at 40-50cents