Monday, November 18, 2013

Yangzijiang Shipbuilding - Earnings-decline overhang (CIMB)

Yangzijiang Shipbuilding -
Current S$1.20
Target S$1.30
Earnings-decline overhang

YZJ's stock could be range-bound after its 21% appreciation since our upgrade in Aug on the back of stronger orders. Although we believe its order momentum can be sustained in the next six months, lower earnings and margins in FY14 could limit further near-term upside.

We downgrade the stock to Neutral from Outperform. 9M13 net profit was in line at 70% of our FY13 forecast though above consensus at 85%. 9M13 order book was US$3.87bn (wins of US$2.1bn by 1 Oct). We raise our EPS for FY15 on higher revenue recognition and roll over our target price to end-FY14, still based on 1.4x P/BV (-1 s.d. of its 5-year mean).


High tax in 3Q13; more "other income" in 4Q13
3Q13 revenue declined 17% qoq as YZJ delivered eight vessels vs. 11 in 2Q13. Gross margins of 22% were slightly ahead of our 20%. 3Q13 net profit would have been higher if not for a high tax rate (29%) from withholding taxes for Chinese subsidiaries' distributable profits and higher taxes for its new yard (25% vs. 12.5% in FY12). 4Q13 revenue could dip qoq with fewer high-value vessels scheduled for delivery. Net profit, however, should still be on track as YZJ expects to receive government subsidies in compensation for yard relocation and tax incentives.

Strong order outlook
Our 2013 order target is still US$2.5bn, although management is bullish that YZJ may close 2013 with more than US$3bn of orders. YZJ has 28 outstanding options (US$1.36bn). Its order strength has in fact encouraged management to reopen its Changbo yard (shut in 2012), adding 10% capacity to handle smaller vessels (60k dwt bulkers and 1,000 teu containerships). Payment terms have also improved to 30/70 or 40/60 from 20/80.

Weak FY14 before a recovery in FY15
YJZ may lack further near-term catalysts in view of weaker quarterly earnings widely expected for FY14 as it executes lower-margin vessels with most of its high-value pre-GFC vessels delivered in FY13.


Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 13/11/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock