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Yangzijiang Shipbuilding - CGS-CIMB Research 2021-08-06: Strategic Review Of Debt Investment

YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6) | SGinvestors.io YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)

Yangzijiang Shipbuilding - Strategic Review Of Debt Investment

  • Yangzijiang Shipbuilding said that it is conducting a preliminary strategic review of its debt investment portfolio to focus on shipbuilding. If spun off, it is a major catalyst.
  • Other gains helped Yangzijiang Shipbuilding beat our 2Q21 expectations. Net profit of S$877m (+38% q-o-q, +37% y-o-y) was higher than our S$680m-710m.
  • Order book solid at US$8.65bn. Maintain ADD on Yangzijiang Shipbuilding with unchanged target price of S$1.91. Outcome of strategic review of debt investment portfolio is a major catalyst.



Strategic review of debt investment, more disclosure

  • Yangzijiang Shipbuilding (SGX:BS6) changed its reporting format slightly to reflect segmental stomach the potential loss of recurring income of interest from debt investment (~50% of its gross profit). 2Q21 debt investments balance grew to RMB16.6bn (1Q21: RMB14.8bn), with interest income down 14% q-o-q to RMB417m.


Other gains helped the beat, offset by higher credit cost



Shipbuilding margin lower as expected






LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2021-08-06
SGX Stock Analyst Report ADD MAINTAIN ADD 1.910 SAME 1.910



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