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%