Yangzijiang

Yangzijiang: 1Q14 net profit beat estimates with net profit increasing 11% to Rmb799.2m while revenue rising 24% to Rmb3.5b, on the back of the delivery of 7 vessels, contributing 63% of total revenue. Revenue was also supplemented by the expansion of the trading business (34% revenue). Group wide, gross margins fell to 29.5% from 36%. Shipbuilding business registered 24% gross margins. Other income rose 26% to Rmb 92m, Interest income and charter income from ship finance leasing also buoyed bottomline. YZJ’s latest orderbook amounts to US$5.19b with 125 vessels, which will keep the shipyards fully utilized until FY16. YZJ’s first jack-up rick is on track for delivery mid 2015. The Shipping Logistics is looking to increase fleet size from 4 to 9 by mid 2015, while property segment, the Group is expecting to start recognizing relocation fees as relocation works at the old yard is almost complete. YZJ is currently trading at 6.5x annualized 1Q14 P/E.