Yangzijiang Shipbuilding (YZJ) Report:
- Stock: Yangzijiang Shipbuilding (Holdings) Ltd.
- Ticker: SGX: BS6
- Price: $2.48
- Market Capitalization: $9.8 billion
- PE Ratio: 8-9x PE
- Dividend Yield: Just under 3%
- Target Price: $3.20 (Bloomberg consensus)
- Potential 1-Year Return: 27%
Joint Venture Announcement:
Yangzijiang Shipbuilding announced a joint venture with Tsuneishi Holdings Inc. (THD) to acquire a 34% equity stake in Tsuneishi Group (Zhoushan) Shipbuilding Co., Ltd. (TZS) through a private share allotment. The acquisition price is RMB833,050,297, reflecting TZS’s audited net asset value as of December 31, 2023. The acquisition will be funded from internal resources, making TZS an associate company of Yangzijiang.
Details on the Joint Venture:
- Company Background:
- Yangzijiang Shipbuilding is a globally leading shipbuilding group based in China and a component of the Straits Times Index (STI).
- The group has a history of collaborations with Tsuneishi through their joint venture, Jiangsu Yangzi-Mitsui Shipbuilding Co., Ltd.
- Purpose: The joint venture aims to combine the expertise of both parties in research, development, shipbuilding, and supply chain capabilities. It is expected to advance shipbuilding technologies and maximize efficiencies.
- Commentary from Leadership:
Executive Chairman and CEO, Mr. Ren Letian, expressed optimism for the partnership, emphasizing the synergies between the two companies.
Stock Performance:
- YTD Performance: 67% increase, making it the top-performing stock among the STI components.
- Outlook: The company’s strong financial position and a robust order book, combined with its focus on environmentally friendly shipbuilding, provide a favorable long-term outlook despite the strong recent performance.
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