Yangzijiang - Yangzijiang target raised to $2.57 vs $2.15 by CIMB

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: CIMB

CIMB lifts Yangzijiang’s (BS6.SG) target price to $2.57 vs $2.15, based on 14x P/E vs 11x previously, after increasing its 2011 order-win assumption to US$1 billion ($1.3 billion) vs US$800 million.

Adds, the China-based shipbuilder secured US$1.3 billion worth of news orders in 3Q10; “we believe the strength in containership orders could make up for the softer demand for bulk carriers in 2011.”

Says FY11-FY12 consensus earnings estimates for Yangzijiang appear too low; “a blanket upgrade by the Street is very possible as the market could have underestimated YZJ’s profit margins and revenue recognition.” Keeps its Outperform call.

The shares are flat at $1.94.