Summary:

  • Undervalued Investment with a target price range of $1.64 – $1.94. This represents a margin of safety of 70 – 100%.
  • Prudent, competent and transparent management.
  • Improving balance sheet health despite industry consolidation.
  • A steady performer with strong earning capabilities.
  • High and consistent historical dividend

Introduction

Yang Zi Jiang (YZJ) is the largest private shipbuilding in China. YZJ produces a broad range of commercial vessels such as container ships, bulk carriers, and Liquefied Natural Gas (LNG) vessels. Apart from the main shipbuilding business, YZJ is also engaged in its own financial investments and other shipbuilding related business such as ship logistic, chartering and design services.

Product Mix

Over the years, YZJ had diversified their product mix to provide for multiple streams of income. This is in line with what the management intention to achieve back in 2013 – a 40% revenue from other streams of income apart …