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By UBS
Dtd 5/3/08
Simply oversold
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Shares down despite robust results
Fears of rising steel prices and spillover from US recession have sent
Yangzijiang?s (YZJ) shares down 49% in the last three months, underperforming
the market. This is despite the company?s stronger-than-expected 2007 results,
delivering an industry-leading 23% gross margin and 91% y/y growth in net profit.
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Rising steel costs manageable
We find that steel prices tend to lead YZJ?s margins by five quarters. Though the
current high steel price may well impact margins in H209, we believe the market
underestimates the effect of faster rising vessel prices. In our view, those orders
signed for early delivery in 2009 will help YZJ fend off margin pressure.
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We expect minority stake purchase to be a positive catalyst
YZJ management has indicated its intention to complete the acquisition of a 24.8%
minority stakes in the new yard as early as in Q108, so as to take full advantage of
the latter?s tax exemption status. Based on our assumption, we estimate the
acquisition could be 11% EPS accretive.
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Valuation: Cut PT to S$2.65 from S$2.80, maintain Buy rating
We lower our DCF-based price target from S$2.80 to S$2.65, (WACC of 12.9%, g
of 3.0%), following a 5% down-revision to our earnings forecasts for 2009 and
2010, mainly to reflect UBS?s latest forecast of the renminbi/US$ exchange rate.
Boasting a net cash/market cap ratio of 26% and trading at 11.4x/7.4x 2008E/09E
PER, YZJ is cheaper than regional peers. We reiterate our Buy rating on the stock.
Is this sign of recovery ?
What is the support ?
$0.985 is the resistance met ...currently bounced off tt level exactly
ha.. any contra players heard see my post and went in low of 0.925?? rebound to 0.97 today.. good profit.. dude.. for long term investors.. still not the time yet.. its jus a trap to trap retail shortists...
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* Alert Admin |
FA for the industry outlook is not promising.. and like say earlier... got rumours in china saying that there are alot of order cancellations going on.. might not be from YZJ but i think ppl tryin to play safe. got to see if YZJ is being affected from cancellation. If nothing wrong with the order books,. anything below 95c is a reasonable valuation like wat i mentioned earlier if u wan to really hold long term.... Personally for myslef, i am only interested when its at 90c, 12mths TP expected $1.20 based on current mkt conditions. If worsen, then mayb a 20-30% revsion downwards. Expect to see real action after confirmation from 1Q08 results. From now till then, trading range.
Contra players, expect some rebounds back to 97c. Currently is selling overdone by retails. Massive short selling.. if to observe the buy/sell history.
not vested. caveat emptor applies..
Happy trading.. |
I've done an analysis on this counter on
www.bear-analysis.blogspot.com
For TA enthu, do let me know your comments.
The ups and downs of this counter. Till date, it's still in no man's land, Short term stay out.
...looking at the YZJ counter now....previous days or rather a week ago even...we see buy/sell queues at over 1 million....today this counter definitely has ALOT lesser queues...
our SGX counters less and lesser volume liao...this is a boring time to trade
rebounce time,,,,,,,,,who buy yesrerday will have reward,,,,,,but early bird will profit,,,,,,,,big boy jus cover short before that short higher again,,,,,,,time to take the reward,,,,,,good luck,,,,may be jus one hour only before hk ang shanghai turn bab again,,,,,,,,,,,cheers
WA, like tat can short all the china stocks liao?? PM Wen shouldnt comment now.. Olympics coming..
Think more to drop tmr... collecting at $0.50? heehee...
this can be a good things. Mr PM Wen see the problem and tackle the problem now, before overheating...so better than the problem got out of way and then takes action it will be too later by then.
According to analyst report for the end of market day on FM95.8
The S-Shares here are affected by PM Wen speech on the need to tackle inflation and overheating econmony.
He mentioned about this stock. The selling may or may not be done as it is trying to form a new base.
His definition on the new base px is that the volume will become low for a period of time.
And that is the new base px.?? Investor may then decide the next course of action.
CIMB report that there is a delay of contract and high steel px as reason for the drop.
It is all due to margin call. Look likely to be an end to margin call. Closed at 94c instead of 92.5c. Keep a lookout for opportunity.
up and down up and down
now got to wait for the sun to rise again
cheers and good luck to of us... happy trading guys and ladies.
Traders said the slump was on worries about higher costs and the risk of order cancellations. These are not only adversely affecting Yangzijiang, but also Cosco and JES.
may be some ppl or big shot is collecting this v cheap pricing at this moment and waiting for the timing...to sell higher. it's always like that and same goes to all of us, buy cheap and sell high. the next moment rumours we might heard news/calls/talks buying TP going up/breakout soon or etc... and everyone start pushing up the price. so see. who's is the winner? we or the other ppl rumours?
just do your homework first. if you want to hold you hold, if you want to cut loss just cut loss, the option are at your fingers tips and trade at our own risk!
This share, I watched from 9am to 12pm, about 1.02. Went out for long lunch, came back, saw lowest price 0.925 of something like that, nearly fell off my chair.
Jesus Christ, the dumping never cease after so many days....
simply cannot imagine my eyes, that it really dare to drop below IPO...
wave pattern consistent; established already:
yzj: one or two small rebounds likely; not more than 10c each time (wld put a closer fig at ~6c). Be careful if williams does not break -40 on the rebound; signal to lock in and run.
Thereaft the net picture is down; support at ~69-72c. Stronger viable support is actually ~61.
Note: above is for short term only; <1 mth; on assumption nothing major changes.
caveat applies; not vested. wld actually advise not vesting.
Why it not only rain but it pour...bad news one after another...
DJ MARKET TALK: SGX-Listed China Shares Hurt By Chinese PM Speech
0342 GMT [Dow Jones] Singapore-listed China shares mostly lower, tracking weakness in Shanghai market, following Chinese premier Wen Jiabao's speech at National People's Congress that country faces rising economic risks from inflation, global slowdown. FTSE ST China Index down 2.6% at 483.56 (STI off 0.5%). Wen blames rising international prices for grain, oil for higher inflation in China; adds increased bank lending contributing to spike in property prices. "Wen's comments are weighing on China stocks here," says foreign house dealer. Major decliners include Cosco (F83.SG) off 4.4% at S$3.46, Yangzijiang (BS6.SG) off 5.4% at S$0.955, China Sports International (CP6.SG) off 6.5% at S$1.01. Local house dealer says while S-shares recently sold down 30%-40%, they're unlikely to rebound soon; "there's no reason for them to run up." (FKH)
Sell Sell Sell
