Yangzijiang - Yangzijiang +3.5%; undemanding P/E - UOB KayHian

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: UOB KayHian

Yangzijiang (BS6.SG) is +3.5% at $2.08, its highest level since December 2007 with a strong 32 million shares traded, after the China-based shipbuilder says it secured 15 newbuild orders worth US$415.3 million ($534.6 million) in 4Q10; vessels will be delivered 2011-2013. 

UOB KayHian, which has a Buy rating and a $2.37 target, says the orders bring YZJ’s full-year newbuild orders to 50 vessels totaling US$1.39 billion. 

“The value is mildly below our forecast of US$1.50 billion but is still a favorable number to YZJ. However, as we didn’t see any newbuilding orders of containerships in 4Q10, we expect more such orders in 2011 given improved profitability of container carriers, which helps to underpin YZJ’s newbuilding orders value and improve margins from 2012 onwards.” 

Adds, valuation of 12.5X 2012E P/E “looks undemanding given the strong momentum for newbuilding orders.” Orderbook suggests $2.10 cap today.