Yangzijiang

Yangzijiang: Seaspan, a ship-leasing unit of Tiger Group Invmts, may order as many as 15 more container ships over the next year to benefit from the lowest vessel prices in more than four years. Seaspan CEO Gerry Wang, said it is in talks with two to three container lines to lease the ships it plans to purchase. The company had already ordered another 15 vessels from Hyundai Heavy Industries in the last three weeks, to be delivered from 2015. Wang observes, “there’s always demand for modern ships and for fuel-efficient ships… Operators are getting more confident… more older ships [will be] phased out.” Ship prices have dropped because of industrywide losses, overcapacity and tighter financing caused by European banks paring lending. The price of a vessel that can carry as many as 13,500 TEU containers was worth US$107m last month, the lowest since Jun ’08, according to Clarkson, the world’s biggest shipbroker. Yangzijiang may be a beneficiary of more orders from Seaspan. YZJ currently has 11 firmed orders from Seaspan, for the 10,000 TEU containerships, 4 of which were options exercised last wk at a price tag of ~US$90m per vessel. An earlier order of 7 vessels was priced at US$100m per vessel. YZJ currently has 14 more options with Seaspan outstanding. YZJ trades at 5.1x P/E, 1.3x P/B.