Yangzijiang - US$2 b contract coming?

CLSA on Mar 24 had a report expressing concern over the tripling of yar capacity by YZJ in the next 5-7 years. This is a longer-term matter and CLSA seems to have the confidence to predict such an overcapacity while YZJ bosses are more optimistic.

In the meantime, the upcoming US$2 billion contract, if it materialises as it should, will be a big boost to confidence in the shipyard.

When CLSA put out their report, the stock was $1.74. now it's $1.82 - so short term, the report was not very helpful in a sense.

For waht it's worth, this is what CLSA said:

"YZJ’s plans to triple yard capacity in the next 5-7Y carry significant risk of
over-capacity, even after factoring in its coup of 22 10,000 TEU
containership orders from Seaspan (to be finalized soon). Current bulk
and container outlook, even post Japan quake, are not supportive of a
surge in new orders. While we upgrade stock from SELL to U-PF post the
recent correction, forward PE of 10x (i.e. in line with the historical mean)
is not compelling and we remain cautious given current headwinds."

The believers have gained - the stock is now $1.83.
This month or next month, YZJ has to announce the signing of the contract ..... or else the stock will die

Is YZJ attractive still at $1.82?

At $1.70-level, Deutsche analyst Kevin Chong wrote: “YZJ remains one of the most attractive shipbuilding stocks in China in our view and is one with a good long-term execution track record. Maintain Buy.”

Now, how?

YZJ got sold down in the past week from $1.85 to $1.70.
People manipulating the stock? Will YZJ announce Seaspan contract soon?

YZJ is a well-run yard and you can expect a rising tide of orders for containerships.

DBS Vickers has raised its target to S$2.70 -- very generous!  TP is at 14x current year earnings.

Market is generally very weak. Looking for rebound next week after the election, asuming the results are within prediction range.