30-07-2015, 09:07 PM
Few announcements on re-structuring of the company investments. It is mainly minor alignments.
(vested)
http://infopub.sgx.com/FileOpen/Announce...eID=362523
(vested)
http://infopub.sgx.com/FileOpen/Announce...eID=362523
(05-08-2015, 09:56 PM)BlueKelah Wrote: [ -> ]First property investment loss, next will be htm writedown, just wait and see.
sent from my Galaxy Tab S
(06-08-2015, 09:43 AM)greengiraffe Wrote: [ -> ]csfb maintain NEUTRAL:
● Yangzijiang’s 2Q15 net profit of Rmb1.03 bn was boosted by a
Rmb157 mn gain on disposal of financial assets, Rmb155 mn
forex gains, and Rmb124 mn subsidy income. Excluding these
gains, 2Q15 would be in line with consensus.
● Shipbuilding gross margin fell to 14.8% in 2Q15 from 20.8% in
1Q15, due to recognition of lower-margin contracts. Management
remains confident of achieving US$2.0 bn of new orders in 2015,
but this could be at lower gross margin.
● While held-to-maturity (HTM) assets decreased to Rmb10.8 bn in
2Q15 from Rmb11.7 bn in 1Q15, available-for-sale assets
increased further to Rmb1.4 bn in 2Q15 from Rmb1.0 bn in 1Q15.
Following the disposal of Hengyuan real estate for Rmb1.0 bn,
some proceeds could be deployed into HTM assets.
● We lower our shipbuilding gross margin assumption to 16-17% in
2016-17, which leads to a 11-12% decline in our EPS. Our target
price is reduced to S$1.30 (from S$1.50), based on 8x
shipbuilding earnings. Maintain NEUTRAL.
DBS maintain BUY:
Against all odds
2Q15 results slightly above; shipbuilding gross
margin was low at 15% due to conservative
recognition for new projects
Secured new orders worth US$510m in Jul-Aug
Prime beneficiary of industry consolidation
Reiterate BUY with 25% upside potential to our
S$1.62 TP plus 4-5% dividend yield
Highlights
2Q15 results slightly above. Yangzijiang reported 2Q15
PATMI of Rm1,031m (-7% y-o-y; +46% q-o-q), boosted by
subsidy income and gain on disposal of financial assets in the
quarter. This brings 1H15 PATMI to Rmb1,737m, making up
54% of our full year estimate (excl. old yard relocation fee).
The y-o-y decline in 2Q15 PATMI was attributable largely to
lower shipbuilding margins, and absence of Rmb349 tax
refund, partially offset by gain on disposal of financial assets
(Rmb158m) and subsidy income (Rmb124m).
Lower shipbuilding margins. Core shipbuilding gross margin
contracted 6ppts q-o-q to 14.8% due largely to prudent
recognition of new projects that hit initial recognition in 2Q,
especially for new vessel types like the 208dwt bulk carrier.
We expect margins to improve in 2H and average around 17%
for full year.
Sound balance sheet. Including Held-to-Maturity (HTM)
investments, Yangzjiang is in net cash, equivalent to 42 Scts
per share or 34% of its NTA.This bodes well for M&A
activities.
Outlook
New orders. Yangzijiang has secured new orders worth
US$510m in Jul-Aug, comprising four 9,700 TEU and four
3,800 TEU containerships; each comes with four options
totaling US$510m. This brings YTD wins to US$883m,
representing 44% of its US$2bn target. Nine existing orders,
primarily dry bulks, were changed to containerships, resulting
in an increase of US$25.4m to its orderbook.
Potential order pipeline includes 10k/14k TEU containerships,
LNG carriers, VLCC and tankers.
Orderbook stood at US$4.14bn as of end-Jun 2015 (excluding
orders won in Jul-Aug), translating into a healthy book-to-bill
of 1.8x.
GS maintain NEUTRAL:
Neutral Equity Research
Below expectations: Weak shipbuilding margins drive miss
What surprised us
YZJ reported 2Q15 operating profit of Rmb938mn (-13% yoy). 1H15 operating
profit of Rmb1.65bn (-19% yoy) was 45% / 47% of prior GS / Bloomberg
consensus FY15E – which we see as below expectations. 2Q15 highlights: 1)
Sales of Rmb5.7bn (+34% yoy) beat GSe, driven by higher-than-expected
trading sales (e.g. scrap metal sales) of Rmb1.4bn (+192% yoy), which is
lumpy in nature; 2) Gross margins of 18.0% (1Q15: 25.7%; prior GSe:
24.2%), however, disappointed given initial sales recognition of first time
projects (e.g. 208K dwt dry bulk) and higher-than-expected trading sales mix
(which has low GPM of 2%); 3) No new orders were secured during 2Q,
but YZJ has received US$510mn containership new orders during Jul-Aug.
While ytd new orders of US$0.9bn are tracking below GS FY15E of US$1.7bn
(company guidance: US$2bn), YZJ stated that it may turn more aggressive
and is now willing to secure orders at lower margins; 4) Customers
requested to modify 9 vessels in the existing orderbook (7 vessels
from dry bulk to containership and 2 vessels from large dry bulk to smaller dry
bulk) given weak dry bulk outlook, which overall resulted in slightly higher
orderbook of US$25mn but with limited impact on margins; 5) Trust loans
declined qoq to Rmb10.8bn (1Q15: Rmb11.7bn). YZJ maintains it guidance
of keeping trust loans below Rmb10bn by end-2015.
What to do with the stock
Maintain Neutral. We cut our 2015E-2017E EPS by 1%-6% to factor in lower
shipbuilding margins. Consequently, we revise our 12-m EV/GCI vs.
CROCI/WACC-based (cash return multiple of 0.7X unchanged) TP to S$1.40
(S$1.48 prior). Key risks: (1) stronger-/weaker-than-expected shipping
demand; (2) stronger-/weaker-than-expected competition.
(06-08-2015, 11:32 AM)greengiraffe Wrote: [ -> ]Nomura maintain BUY:
On track to achieve USD2bn of new orders
Results in line, balance sheet de-risking to continue
Action: Maintain Buy rating and target price of SGD1.70
Global Markets Research
Rating
Remains
Buy
Target price
Remains
SGD 1.70
Closing price
4 August 2015
SGD 1.32
Potential upside
+29.3%
Anchor themes
YZJ is the second-largest yard in China for building dry bulk carriers, and is making good inroads into the construction of 10K-TEU containerships. It is one of the most profitably run Asia-listed yards, and the yard has also built up one of the largest order books among Asian yards. We believe these provide good profit visibility.
Nomura vs consensus
Our FY15/16F core net profit estimates are 20%/36% above consensus.
Research analysts
Singapore Capital Goods
Wee Lee Chong - NSL
weelee.chong@nomura.com
+65 6433 6960
Abhishek Nigam - NSL
abhishek.nigam@nomura.com
+65 6433 6969
We maintain our Buy rating and target price of SGD1.70 for Yangzijiang (YZJ). Our TP is based on 1.2x forward P/B on blended FY15/16F BVPS of CNY6.4. Key catalysts for the stock according to us are: 1) continued balance sheet de-risking as affirmed by 2Q15 results, 2) our expectation of stronger order wins in 2H15F, and 3) the possible return of bulk carrier orders given the recent seasonal strength in BDI.
BDI at 1,200 level to catalyse dry bulk carrier orders in 2H15F
YZJ announced securing new orders worth USD510mn on 5 August 2015, along with 2Q15 results. Additionally, management guided that it remains confident about achieving its USD2bn of new order target even before the end of 2015. Total new orders secured YTD 2015 were at USD0.9bn and form 44% of our full-year new order target of USD2bn. BDI reached 1,200 on 4th August 2015 and we think such a seasonal rebound can catalyse dry bulk carrier orders in 2H15F.
Net profit in line with our above-consensus FY15F estimate
YZJ’s 1H15 net profit formed 49% of our and 58% of consensus FY15F estimates. Shipbuilding revenue received a strong boost during the quarter, up 12% y-y, mainly due to the addition of 11 vessel deliveries in 2Q15 (2Q14: 9 deliveries). Trading business revenue rose strongly to CNY1.4bn (2Q14: CNY0.5bn), but gross profit margins were a low 2%. Interest income from held-to-maturity (HTM) assets, too, received a solid boost to CNY412mn (2Q14: CNY315mn).
Balance sheet de-risking continues with HTM assets now at CNY10.8bn
YZJ’s HTM assets stood at CNY10.8bn at the end of 2Q15, down sharply by 8% from CNY11.7bn at end-1Q15. Management reiterated that the focus on de-risking the balance sheet remains.
OCBC downgraded to HOLD:
Can't beat the tide...
Cannot download details...
(06-08-2015, 09:43 AM)greengiraffe Wrote: [ -> ]csfb maintain NEUTRAL:
● Yangzijiang’s 2Q15 net profit of Rmb1.03 bn was boosted by a
Rmb157 mn gain on disposal of financial assets, Rmb155 mn
forex gains, and Rmb124 mn subsidy income. Excluding these
gains, 2Q15 would be in line with consensus.
● Shipbuilding gross margin fell to 14.8% in 2Q15 from 20.8% in
1Q15, due to recognition of lower-margin contracts. Management
remains confident of achieving US$2.0 bn of new orders in 2015,
but this could be at lower gross margin.
● While held-to-maturity (HTM) assets decreased to Rmb10.8 bn in
2Q15 from Rmb11.7 bn in 1Q15, available-for-sale assets
increased further to Rmb1.4 bn in 2Q15 from Rmb1.0 bn in 1Q15.
Following the disposal of Hengyuan real estate for Rmb1.0 bn,
some proceeds could be deployed into HTM assets.
● We lower our shipbuilding gross margin assumption to 16-17% in
2016-17, which leads to a 11-12% decline in our EPS. Our target
price is reduced to S$1.30 (from S$1.50), based on 8x
shipbuilding earnings. Maintain NEUTRAL.
DBS maintain BUY:
Against all odds
2Q15 results slightly above; shipbuilding gross
margin was low at 15% due to conservative
recognition for new projects
Secured new orders worth US$510m in Jul-Aug
Prime beneficiary of industry consolidation
Reiterate BUY with 25% upside potential to our
S$1.62 TP plus 4-5% dividend yield
Highlights
2Q15 results slightly above. Yangzijiang reported 2Q15
PATMI of Rm1,031m (-7% y-o-y; +46% q-o-q), boosted by
subsidy income and gain on disposal of financial assets in the
quarter. This brings 1H15 PATMI to Rmb1,737m, making up
54% of our full year estimate (excl. old yard relocation fee).
The y-o-y decline in 2Q15 PATMI was attributable largely to
lower shipbuilding margins, and absence of Rmb349 tax
refund, partially offset by gain on disposal of financial assets
(Rmb158m) and subsidy income (Rmb124m).
Lower shipbuilding margins. Core shipbuilding gross margin
contracted 6ppts q-o-q to 14.8% due largely to prudent
recognition of new projects that hit initial recognition in 2Q,
especially for new vessel types like the 208dwt bulk carrier.
We expect margins to improve in 2H and average around 17%
for full year.
Sound balance sheet. Including Held-to-Maturity (HTM)
investments, Yangzjiang is in net cash, equivalent to 42 Scts
per share or 34% of its NTA.This bodes well for M&A
activities.
Outlook
New orders. Yangzijiang has secured new orders worth
US$510m in Jul-Aug, comprising four 9,700 TEU and four
3,800 TEU containerships; each comes with four options
totaling US$510m. This brings YTD wins to US$883m,
representing 44% of its US$2bn target. Nine existing orders,
primarily dry bulks, were changed to containerships, resulting
in an increase of US$25.4m to its orderbook.
Potential order pipeline includes 10k/14k TEU containerships,
LNG carriers, VLCC and tankers.
Orderbook stood at US$4.14bn as of end-Jun 2015 (excluding
orders won in Jul-Aug), translating into a healthy book-to-bill
of 1.8x.
GS maintain NEUTRAL:
Neutral Equity Research
Below expectations: Weak shipbuilding margins drive miss
What surprised us
YZJ reported 2Q15 operating profit of Rmb938mn (-13% yoy). 1H15 operating
profit of Rmb1.65bn (-19% yoy) was 45% / 47% of prior GS / Bloomberg
consensus FY15E – which we see as below expectations. 2Q15 highlights: 1)
Sales of Rmb5.7bn (+34% yoy) beat GSe, driven by higher-than-expected
trading sales (e.g. scrap metal sales) of Rmb1.4bn (+192% yoy), which is
lumpy in nature; 2) Gross margins of 18.0% (1Q15: 25.7%; prior GSe:
24.2%), however, disappointed given initial sales recognition of first time
projects (e.g. 208K dwt dry bulk) and higher-than-expected trading sales mix
(which has low GPM of 2%); 3) No new orders were secured during 2Q,
but YZJ has received US$510mn containership new orders during Jul-Aug.
While ytd new orders of US$0.9bn are tracking below GS FY15E of US$1.7bn
(company guidance: US$2bn), YZJ stated that it may turn more aggressive
and is now willing to secure orders at lower margins; 4) Customers
requested to modify 9 vessels in the existing orderbook (7 vessels
from dry bulk to containership and 2 vessels from large dry bulk to smaller dry
bulk) given weak dry bulk outlook, which overall resulted in slightly higher
orderbook of US$25mn but with limited impact on margins; 5) Trust loans
declined qoq to Rmb10.8bn (1Q15: Rmb11.7bn). YZJ maintains it guidance
of keeping trust loans below Rmb10bn by end-2015.
What to do with the stock
Maintain Neutral. We cut our 2015E-2017E EPS by 1%-6% to factor in lower
shipbuilding margins. Consequently, we revise our 12-m EV/GCI vs.
CROCI/WACC-based (cash return multiple of 0.7X unchanged) TP to S$1.40
(S$1.48 prior). Key risks: (1) stronger-/weaker-than-expected shipping
demand; (2) stronger-/weaker-than-expected competition.