Stock is firm - now at $1.74. but still down from the level before the recent correction wave. Wonder why YZJ won't say anything about the widespread reports from analysts on the impending contract.
With regard to the impact of Japan's earthquake disaster, COSCO (S) said it may be negative on the shipping market in the immediate term as the closure of Japanese ports will affect trades. However, it is likely to be positive in the medium term as
a) the global shipping fleet growth will be smaller as ship deliveries from Japanese shipyards will now be limited, and
b) a higher demand for bulk carriers (i.e. for timber, cement, coal, etc) when Japan starts its reconstruction. We maintain our BUY call, earnings forecasts and target price of S$2.30.
Nomura reaffirms Buys on Keppel, SembMarine, Yangzijiang Shipbuilding
Written by Dow Jones & Co, Inc
Wednesday, 23 March 2011 14:26
Nomura maintains its bullish stance on the Singapore Offshore & Marine sector in 2Q11F, “as we expect Keppel Corp. (BN4.SG) and SembCorp Marine (S51.SG) to continue their market outperformance, underpinned by a more pronounced rig-building cycle upturn with the potential return in semi-sub order momentum.”
It Reaffirm its Buy ratings on both counters with Keppel its top pick. The house also reaffirms Yangzijiang Shipbuilding (BS6.SG) at Buy, saying “as China shipbuilders build track records, they should gain a bigger share of the nascent commercial shipbuilding upturn.”
It notes, YZJ’s discussions with Seaspan for a potential US$2.2 billion order (22X 10,000 TEU containerships, including options) “are arguably well-known to the market but not priced in as we believe investors remain sceptical on the risk-reward.”
It says “the continued recovery in offshore rigs, production vessel and shipbuilding orders for Singapore and China shipyards will provide positive momentum over the next 6-12 months.” Keppel is +0.3% at $11.76, SMM is +0.4% at $5.68, YZJ is flat at $1.74.
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