Yangzijiang Shipbuilding (YZJ) reported its 1Q14 results this morning, with revenue increasing 24% YoY to RMB3.6b, while PATMI rose 11% to RMB799.2m. The latter was ahead of our expectations, with topline and bottomline forming 25% and 29% of our FY14 forecasts, respectively.

YZJ successfully delivered seven vessels in 1Q14. YTD, it has clinched US$1.07b worth of effective orders, comprising 26 vessels, thus bringing its outstanding order book to US$5.19b (125 vessels, as at 31 Mar 2014). According to YZJ, these orders will enable its shipyards to remain fully utilised until the end of 2016. Pending more details from an analyst briefing later, we place our Hold rating and S$1.21 fair value estimate under review.

Source: OCBC Research - 30 Apr 2014