Yangzijiang

Yangzijiang: CS has an OUTPERFORM rating with $1.19 TP. House expect a mild commercial shipbuilding upcycle in 2014, driven by vessel prices that are close to trough, as well as a sustained recovery in the global economy. A growing order backlog for yards should be positive for newbuild prices, which have improved 4.0% since troughing in May 2013. With its strong financial position, CS expect Yangzijiang to benefit disproportionately from the recovery in newbuild orders. Yangzijiang has secured US$2.63b of contracts as of 13 Nov, representing 88% of its 2013 forecast of US$3.0b. House expect another US$2.4b of orders for the company in 2014, as Yangzijiang has 30 options outstanding worth US$1.48b, including options with Seaspan for nine 10,000 TEU containerships.