Yangzijiang (BUY; TP S$1.80)
*Secured new orders worth US$715m in May-Jun
*YTD wins to US$4.7bn, best ever since 2008; look set to surpass US$5bn record orders in 2007
*New wins include first batch of 3 units 40kCBM LPG carriers, a breakthrough for YZJ in the clean energy space
*Newbuild price continues its uptrend, rising 15-20% YTD on average
*YZJ remains one of our top pick in industrial space. Undervalued at 0.8x PB against 9-11% ROE n 4% div yield vs Chinese n Korean peers trading above book despite weaker financials
- Yangzijiang clinched another US$715m new orders in May-Jun
- YTD wins lifted to US$4.7bn, best ever since 2008; looks set to surpass ~US$5bn record orders in 2007 amidst favourable market sentiment
- Valuation remains undemanding at <0.8x PB, against 9-11% ROE; strong balance sheet with net cash of S$1.37/share; unwarranted underperformance relative to Korean & Chinese peers that trade above book despite weaker financial metrics
- Reiterate BUY; TP S$1.80 (~1x FY21 PB) implies 30% upside potential; stock also offers attractive dividend yield of ~4%
