Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: BofA Merrill Lynch
Bank of America-Merrill Lynch restarts Yangzijiang (BS6.SG) at Buy with $2.26 target, based on 14x FY11 P/E, says Dow Jones.
BoA-ML says China-based shipbuilder deserves re-rating given its sustained above-average profit margins, 3-year orderbook visibility, potential to close in on TDR price, which trades at premium to mother shares.
“We believe the market has underestimated the sustainability of Yangzijiang’s profit margins in FY10-12, despite its improving productivity, and the revenue recognition of existing orders that are largely secured at higher prices in 2007-2008,” says BoA-ML.
Research house says company could have RMB9.6 billion ($1.9 billion) in funds for acquisitions in FY11, with potential targets being established yards equipped for new business like offshore marine engineering, or new yards located near to Yangzijiang’s existing facilities. Shares -0.6% at $1.68.
No comments:
Post a Comment