Yangzijiang

Yangzijiang: (S$0.875) 2Q16 misses on double whammy of falling sales and increased expenses
-2Q16 net profit missed estimates, crashing 60% to Rmb415.4m.
- Revenue tumbled 48% to Rmb2.99b, dragged by all segments. Shipbuilding (-51.8%) on lower vessels delivered (2Q16: 7, 2Q15: 11). Trading business saw income fall 37.7% to Rmb883.9m on lower volumes.
- Finance costs soared 90% to Rmb126m from a revaluation loss from USD borrowings, as the USD appreciated against the Rmb.
- Net gearing inched 2.1ppt higher to 6.4%.
- Ytd new orders of 10 vessels worth US$600m. In 2Q, three more shipbuilding orders were terminated (production not started).
- Trading at 0.76x P/B.