Yangzijiang wants to foray into VLCCs as there are relatively few players in China that build such large vessels. Photo of Yangzijiang's 10k TEU containership: Company
YANGZIJIANG SHIPBUILDING, with bellwether profit, orderbook and cash reserves among PRC shipyards, is taking a step to further strengthen its financial management.
"We are expanding into building LNG / LPG vessels as there is strong demand for such vessels," said Executive Chairman Ren Yuanlin. NextInsight file photoAt its 1QFY2015 results briefing on Thursday, executive chairman Ren Yuanlin, 61, said that he will focus on the Group’s Investment segment to ensure strong financial support for its core business in shipbuilding.
It plans to decrease the portfolio size of its held-to-maturity financial assets to Rmb 10 billion or less by the end of this year and park the excess cash with professionals instead.
That is, through collaboration with sovereign wealth funds or publicly listed companies in venture capital investments.
“We have partnerships in venture capital investments with municipalities in Shanghai, Zhuhai and Wuxi,” said Mr Ren.
He listed 3 criteria for the Group’s venture capital investments.
1. The Group has a stake of 30% of more when it participates as a limited partner.
2. The Group has a stake of 20% of more when it participates as a general partner.
3. The Group has the right to veto against project implementation.
Successor Ren Letian to helm shipbuilding division
Newly appointed CEO Ren Letian was in charge of the Group’s Xinfu Yard in its production of six 10,000 TEU flagship containerships last year. Photo by Sim Kih
His son and successor, Ren Letian, 33, will focus on the Group's Shipbuilding Related segment.
Ren Letian assumed his new role of Group CEO with effect from 1 May 2015.
The Group’s Shipbuilding and related segment contributed 65% to 1QFY2015 gross profitwhile Investment segment contributed 35%.
On 30 April, the Group posted 1QFY2015 revenue of Rmb 3.0 billion, down 14% year-on-year.
10 vessels were delivered in 1QFY2015, compared to 7 vessels in 1QFY2014, resulting in a 26% increase in shipbuilding revenue.
However, revenue from trading fell by 64%, resulting in the top line contraction.
Net profit attributable to shareholders was Rmb 715.6 million, down 10% year-on-year. Group gross profit margin remained healthy at 26%, with shipbuilding gross margin at 21%.
The Group had an order book for 114 vessels amounting to contract values totalling US$4.6 billion as at 30 April.
In April, the Group received 4 new vessel orders: two 36k DWT vessels from Europe as well as two 10k TEU containerships from Seaspan.
