Yangzijiang Shipbuilding (YZJ) reported a 76% YoY rise in revenue to RMB5.5b and net profit of RMB607.8m in 4Q16 vs. net profit of RMB41.5m in 4Q15, with higher revenue and the absence of impairment provision of RMB369m made in 4Q15.

For the full year, YZJ recorded net profit of RMB1.75b vs. our forecast of RMB1.84b, within expectations. Gross profit margin of 24.1% in FY16 was healthy, compared to 23.2% in FY15.

The group has proposed a final dividend of S$0.04/share compared to S$0.045/share in FY15, translating to a yield of 4.3%, based on yesterday’s closing price of S$0.925.

Pending more details from an analyst briefing later, we maintain our HOLD rating but put our fair value estimate of S$0.81 under review.

Source: OCBC Research - 1 Mar 2017