Yangzijiang

Yangzijiang: secured contracts worth US$700m to build 7 10k TEU containerships from Taiwan's Seaspan, with an option to build an additional 18, which if exercised would bring the total value to US$2.5b. The 7 vessels are scheduled for delivery in 2014-15...

The order wins shouldn't come as too much of a surprise; Seaspan in mid-March said it was looking at a leading Chinese shipyard for a significant order, and YZJ was tipped by many as the hot favourite; the stock rose 13.3% in the 19 sessions after that news to $1.92. But, since then it has slumped 20% to Thursday's $1.53...

Stock may now rebound, as YZJ’s achieved price per vessel is close to NOL’s recent 12 ship order for 10.7k TEU containerships valued at US$1.2b, which have been awarded to a Korean yard.
Ytd, YZJ has secured shipbuilding contracts totaling US$1.2b. Outstanding orderbook stands at an est US$6b. Stock trades at 9.1x fwd P/E...

Credit Suisse, which has an Outperform call with a $2.40 target, expected these orders in 2H11. Says YZJ’s weak share price performance YTD is due mainly to concerns about corp governance of Spore-listed Chinese companies. Views the stock as unduly punished given its credible mgt team and strong business fundamentals. Notes recent pullback presents a buying opportunity as the co's long-term prospects remain strong.