Yangzijiang

Yangzijiang: Deutsche hosted Yangzijiang it its latest Asian conference, where YZJ highlighted its strong visibility with its order book of US$5.2b, which should allow its yards to remain well utilised through 2016. YZJ has secured a total of 26 shipbuilding contracts YTD with an aggregate value of US$1.07b. The group also indicated its interest to focus on larger vessels such as 14,000 TEU containerships and LPG vessels, and hopes to secure a number of such contracts in future. YZJ however catuions that many yards in China would face challenging conditions in 2014 as they deliver previous low cost orders. Of the >2,000 yards in China, the group believes less than a hundred of them are stable and most of these are government yards. YZJ has seen orders gravitate towards the stronger private and state-owned yards as ship owners have concerns over many of the weaker players that are facing cash-flow problems. Maintains buy with $1.48 TP.