YZJ

Shipbuilding/YZJ: Vale SA, the world’s largest iron ore producer announced that it will borrow US1.23bn from the Exim Bank of China & BoC to buy 12 Chinamax vessels from China's Rongsheng shipyard. Expect order trend to turn China into a shipbuilding powerhouse bolstering Chinese shipyards such as YZJ & Cosco. YZJ's TDRs (911609 TT), is currently trading at NT$24.60 or $2.00s equiv vs $1.68 on SGX. YZJ valuations at 12x FY11 P/E compares favorably with Cosco Corp's 22x,with the company in a net cash position. Technicals appear overstretched despite the price disparity with its TDRs.