Revenue increased by 110% yoy to RMB8.0 billion in 2Q2018, supported by the delivery of several large-size vessels
Core shipbuilding gross margin at 21%, compared to 20% for 2Q2017
Group secured new orders for 22 vessels from January to July 2018 with total contract value of USD982 million
Outstanding order book stood at USD4.1 billion as at 7 August 2018, will keep the Group’s yard facilities healthily utilized up to 2020
Group’s financial position strengthened further during 1H2018. Gross gearing decreased from 18.4% as at 31 December 2017 to 13.7% as at 30 June 2018, and the Group remained in a net cash position. Net asset value per share increased to RMB6.72 as at 30 June 2018 from RMB6.52 as at 31 December 2017. Group’s cash & cash equivalents and restricted cash increased from RMB6.2 billion as at 31 December 2017 to RMB7.9 billion as at 30 June 2018, or approximately SGD1.58 billion2 , compared to Yangzijiang’s market capitalization of SGD3.59 billion as of 7 August 2018.
REVIEW / OUTLOOK/ FUTURE PLANS
Supported by improving global seaborne trade volume and higher charter rates for several major vessel categories, the shipbuilding market continued to recover in 2018. According to Clarksons Research3 , global containership orderbook to fleet ratio stood at a historically low level of 12%4 , and “the fundamentals (in the containership sector) look set to remain supportive of further market improvements in 2018-19”. On the dry bulker side, the strong demand from China for iron ore and coal, as well as the relaxation of import restrictions at a number of ports in China, will continue to support global seaborne dry bulk trade. In terms of supply, bulk carrier fleet is “projected to expand at a relatively subdued rate of 2.5% in both 2018 and 2019”, and there is “potential for further gradual improvements to balance of fundamentals”, indicating fleet growth gradually catching up with the shipping demand growth.
With regard to the escalation of the trade war, the Group’s existing order book has no exposure to the sectors on the US’ tariff list, and the Group doesn’t see the tariff list directly impacting its future order flow. Various studies suggest limited impact of the protectionism and trade wars on the global trade volume. However, the Group is mindful of the uncertainties and the potential risks to the shipping and shipbuilding demand and will closely monitor the situation.
Year to date, the Group secured new orders for 22 vessels with total contract value of USD982 million. These new orders include 10 units of 82,000DWT, 2 units of 180,000DWT, 2 units of 208,000DWT bulk carriers, 2 units of 2,400TEU and 5 units of 12,690TEU containerships, and 1 unit of 83,500DWT combination carrier. As at 7 August 2018, with an outstanding order book of USD4.1 billion for 114 vessels, Yangzijiang was ranked no. 1 in China and no. 4 in the world. These orders will keep the Group’s yard facilities at a healthy utilization rate up to 2020 and provide a stable revenue stream for at least the next 2.5 years.
From TA point of view,it is on a consolidation mode. It will need to breakout 94 cent then 96.5 cents in order to reverse this downtrend and head higher towards 1.00 with extension to 1.08 level.
Not a call to buy or sell.
Please do you own due diligence.
No comments:
Post a Comment