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Yangzijiang Shipbuilding: Results in line

kimeng
Publish date: Wed, 05 Aug 2015, 10:30 AM
kimeng
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Yangzijiang Shipbuilding (YZJ) reported a 34% YoY rise in revenue to RMB5.7b but saw a 17% decline in PATMI to RMB1.0b, due to a lower gross profit margin of 15% vs. 24% in 2Q14 for the shipbuilding business; 2Q14 was also boosted by a one-off tax refund of RMB349m to the new Jiangsu yard. Excluding one-off items, 1H15 core net profit accounted for 51% of our full year estimates, in line with expectations.

Meanwhile, investments in HTM financial assets decreased to RMB10.8b as at end 2Q15 compared to RMB11.7b in 1Q15. The group also secured new shipbuilding contracts in Jul and Aug worth US$510m, adding to its outstanding order book of US$4.14b as at end 2Q15.

Pending an analyst briefing, we maintain our BUY rating but put our fair value estimate of S$1.54 under review.

Source: OCBC Research - 5 Aug 2015

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