YZJ to acquire 147k sqm land with 500m coastline, and a 374m long wharf currently under construction from the Jiangsu govt for RMB 108m. YZJ received 32% discount on the transaction price as govt incentive. The wharf is expected to be completed in Sep 10, and able to accommodate construction and mooring of ships up to 150k dwt…
We view the yard expansion positively, as it signals mgt’s positive outlook. Acquisition is in line with YZJ’s aim to increase capacity of JNYS by an additional 1m dwt by 2012. Also, the land is strategically located next to subsidiary, Jiangsu New Yangzi Shipbuilding (JNYS), hence allowing for more efficient use of space and possible cost savings. Street mostly rates as Buy, with targets ranging from $1.54 to $1.96.
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