Tuesday, March 24, 2015


Yangzijiang (YZJ): Counter's recent outperformance against O&G peers was likely driven by the already-low expectations on its core shipbuilding segment, as well as the group's small exposure to the O&G sector.

YZJ had an order book comprising 118 vessels worth a total of US$4.75b as at 27 Feb 2015. For FY15, the group is hoping to secure new orders worth about US$2b vs. US$1.8b that was clinched last year.

OCBC believes that YZJ’s good execution track record and significant cash pile (including the held-to-maturity assets) instill confidence in customers to place orders with them.

Meanwhile, the SGD has depreciated about 10% against the RMB since Jul 2014, which translates into a higher TP of $1.42 (from $1.33). OCBC maintains its BUY rating with 16% upside (includes a dividend yield of ~4%).

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