Yangzijiang

Yangzijiang: A foreign broker has reiterated its Buy call on Yangzijiang and raised its TP to $1.70, based on an unchanged 1.2x forward P/B.

Year-to-date, Yangzijiang’s share price has outperformed most of its peers, yielding an attractive return of 25%, where according to Clarkson Research, Yangzijiang ranks as the number one shipyard in China and 8th in the world in terms of outstanding orders.

The foreign broker highlighted that Yangzijiang’s valuation is supported by its huge order backlog of US$4.6b as at end 1Q15, while the group is also expected to benefit from its on-going de-risking of its balance sheet, via the paring down of its held-to-maturity investments.

Recent meetings with Chinese and Korean yards also points to healthy client enquires on LNG carrier orders for 2015, which could translate to more orders going forward for the Chinese yard.

Separately, investor sentiment could have taken a lift, after recent SGX filings showed that BlackRock, the world’s largest asset manager, has emerged to become a substantial shareholder in Yangzijiang, with a 5.0% stake.

Overall, the street has 13 Buy, 3 Hold and 3 Sell ratings with a consensus TP of$1.53.