Yangzijiang

Yangzijiang: released 3Q13 net profit of Rmb820.7m, bringing 9M13 earnings to Rmb2.4b (-15%), on track to surpass FY13 estimates. Revenue came in at Rmb3.7b (+2%).Gross margins remain stable at 29.6% vs 29.4%. The Shipbuilding segment remained as the Group’s core revenue driver, contributing about 90.5% to total revenue. During the quarter, Yangzijiang delivered 8 vessels vs 9 vessels y/y, although revenue was largely unchanged due to higher revenue recognition from construction and delivery of larger vessels. The investment segment (that comprises of interest income from financial assets, held-to- maturity and micro finance business) reported a 14% increase in revenue to Rmb349.1m, largely due to a steady increase in revenue derived from held to maturity investments, while revenue from its micro finance business increased 28% due to higher loan amount extended. Going forward, the grp notes that its outstanding order book of US$3.87b, comprising of 88 vessels, will keep its yards busy until 2016, which is in contrast to the worrying shipbuilding states in China’s shipbuilding industry. With the limited capacity to take on new orders, the group will focus on securing orders for more technologically advanced vessels going forward.