Yangzijiang

Yangzijiang: 2Q10’s turnover rose by 23% to RMB3.1b due to higher recognition from delivery of 12 vessels during the quarter as well as increased productivity in the new yard. Overall GPM also improved from 24% to 25% in 2Q10 as YZJ managed to keep those higher-margin shipbuilding contracts that were secured prior to the financial crisis. Notably, other income which comprises mainly of interest income surge by more than three folds to RMB191.3m in 2Q10.

With YZJ still maintaining its operating expenses at the level of 2% of the revenue, net profit grew by 32% in 2Q2010 to RMB800.5m, largely in line with mkt expectations. The Group’s current order book stood at 124 vessels with a total value of US$5.2b (excluding the order book comprising 20 vessels worth US$338m of the recently acquired yard called Jiangsu Changbo Shipyard).The stock now trades at about 11.6x FY10 and 12.0x FY11 PER