JES

JES: Reported strong of results, with 3Q10 rev +114%YoY to Rmb641m, due primarily to an increase in the number of vessels under construction, as well as the increased capacities from its recently completed new yard facilities. Grp delivered two 37, DWT bulk carriers and one 79,800 DWT bulk carrier in qtr….

We note that while gross profit rose 102% to Rmb58m in qtr, gross margins declined by 0.6%pts yoy to 9.0% Overall, grp’s 3Q10 Net profit at Rmb22.5m 14times vs 3Q09 Net Profit of Rmb1.6m. Balance sheet remains strong, with a net cash position and an order book to US$900m which will be progressively delivered over 2 yrs. At current price, grp trades at undemanding valuations of 1.3x P/B, still off its historical peak of 2.7x, vs Yangzijiang of 4.33xP/B and Cosco 3.8x P/B....

DBSV has Buy call with $0.46 TP.