Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
The bank said Yangzijiang’s ROE is down from about 50% in 2009 to 30% currently, and expects it to fall further to 21% in 2013.
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
| Research House: BNP Paribas | Price Call: HOLD | Target Price: 1.55 |
BNP Paribas has initiated coverage of Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) with a hold rating due factors such as declining return on equity and a target price of $1.55.
BNP Paribas said that although it sees Yangzijiang as one of the best managed yards with strong operating efficiency and market reputation, the firm’s return on equity (ROE) has been declining.
BNP Paribas said that although it sees Yangzijiang as one of the best managed yards with strong operating efficiency and market reputation, the firm’s return on equity (ROE) has been declining.
The bank said Yangzijiang’s ROE is down from about 50% in 2009 to 30% currently, and expects it to fall further to 21% in 2013.
BNP Paribas estimates that Yangzijiang’s capital expenditure or investment will increase from 160 million yuan ($30.7 million) in 2010 to over 2 billion yuan in 2011 partly due to its shipyard acquisition and construction.
However, despite the cost inflationary pressures and ship-building margin concerns, BNP Paribas still expects Yangzijiang to maintain double-digit earnings growth in 2011 on strong orders and a boost to interest income generated from lending operations.
At 10:41 a.m., Yangzijiang shares were up 0.7% at $1.47 on a volume of 7.3 million shares. The stock has fallen around 23% so far this year.
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