UOB KH: 
1H21: Net Profit Better Than Expected With Margin Expansion To Come

Although revenue fell 20% yoy, YZJ’s net profit rose 40% yoy to Rmb1.6b as a result of completion of prior lower-margin orders, a write-back of impairments and higher other income.

1H21 shipbuilding gross-profit margins were low at 14% but we expect margin expansion to occur going forward as YZJ starts to construct its higher-margin containership orders.

We upgrade 2021-23 earnings by 4-7% and maintain our BUY rating. Target price: S$2.00 (previously S$1.90).

Full report here.

 
shiponsea homepagePhoto: YZJ

CLSA:
BUY (Getting out of HTM assets)


Better-than-expected results, a record order-book and it being on the cusp of a robust earnings recovery over the next few years suggests Yangzijiang Ship (YZJ) has room to rerate.

However, another important rerating driver could emerge if the group successfully exits its held-to-maturity (HTM) investments.

HTM assets account for 51% of its equity value and is an overhang for its share price due to it’s a lack of transparency. In addition, it has no synergy with its shipbuilding segment.

As part its plans to improve corporate governance, YZJ disclosed it is conducting a strategic review of its HTM portfolio which could result in the group to ‘focus solely on the expansion of its shipbuilding business.

 We maintain our buy recommendation on an unchanged S$2.05 target price.

 

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings1.840-0.020
Best World2.480-
Boustead Singapore0.950-0.005
Broadway Ind0.1450.005
China Aviation Oil (S)0.865-0.005
China Sunsine0.390-0.005
ComfortDelGro1.390-0.010
Delfi Limited0.875-
Food Empire1.120-0.010
Fortress Minerals0.310-
Geo Energy Res0.3000.005
Hong Leong Finance2.420-0.010
Hongkong Land (USD)3.4200.010
InnoTek0.505-
ISDN Holdings0.300-0.005
ISOTeam0.047-
IX Biopharma0.039-0.004
KSH Holdings0.245-
Leader Env0.049-
Ley Choon0.055-0.001
Marco Polo Marine0.068-0.003
Mermaid Maritime0.1350.002
Nordic Group0.305-
Oxley Holdings0.0900.001
REX International0.124-
Riverstone0.9300.005
Southern Alliance Mining0.480-
Straco Corp.0.490-
Sunpower Group0.230-
The Trendlines0.063-
Totm Technologies0.019-0.002
Uni-Asia Group0.810-0.035
Wilmar Intl3.160-
Yangzijiang Shipbldg1.750-0.020
 

We have 804 guests and no members online

rss_2 NextInsight - Latest News