Yangzijiang
- Original Post from BPWLC BLOG

A former student messaged me on the eve of our National Day that Yangzijiang (YZJ) share price had dropped 20%. For the past 2 weeks or so, I have been very busy and have no time to look at how my stocks performed. What am I busy about? (Click here). Indeed, by the time I was able to avail myself some time, it was already national day on 9 August. The stock price had plunged 20% to $1.04 per share from the previous day close of $1.30 per share. It had already been suspended. Following the national holiday, there was a super long weekend. It was with luck that I had sold 40% of my holding in April. I would have called it an ‘insurance’ sale, taking a leaf from Jerome Powell’s insurance cut of interest rate of 25 basis point on 31 July 2019 to guard against global uncertainties. The stock price has been oscillating stubbornly high between $1.40 and $1.65 recently. Since 2011, the last high around this level was 2 years ago. Given the on-going trade war, it would be a miracle if the share price can continue to remain this high for the rest of the year. Certainly, it would be prudent to take some money off the table and do what I wanted to do, while waiting for an opportune time to buy back the stock when the time comes. With that sale in April 2019, it was a great feeling that all the remaining stocks were held at zero cost down.



Actually, in the last 6 months or so, the stock price seemed to be out of sync with the other stocks. It was especially glaring in view that all the other stocks had already fallen quite a fair bit amidst the trade war between the world’s two largest economies (see previous post – As we approach mid 2019). However, YZJ share price seemed to be extremely resilient even though China has been a direct target of the US in this trade war. In fact, the share price has been defying gravity when it was less $1 per share less than a year ago.


When the suspension
lifted on Thursday, 15 Aug, its share price had run up from the close of $0.86
to $0.99 on Friday helped by the company’s open market purchases. With the
relatively small percentage float held by shareholders of less than one million
shares, it is no wonder that the share price can move ferociously in both ways.
With that, it has been a great opportunity to replenish my stock holding again at
almost 50% discount. However, there is a still one unclear hurdle. It is
interesting that the chairman takes a leave of absence in a police investigation.
That said, it is always good to know that a corporate has a succession plan in
place.


Disclaimer – The above points are based on the writer’s
opinion. They do not serve as an advice or recommendation for readers to buy
into or sell out of the mentioned securities. Everyone should do his homework
before he buys or sells any securities. All investments carry risks.


Brennen has been investing in the stock market for 30
years. He trains occasionally and is a managing partner for BP Wealth Learning
Centre. He is the instructor for two online courses on InvestingNote – Value
Investing: The Essential Guide and Value Investing: The Ultimate Guide. He is
also the author of the book – “Building Wealth Together Through Stocks” which
is available in both soft and hardcopy.


I want to have a free ebook on “Ten golden rules of stock investment” NOW!


More news on
www.bpwlc.com.sg.


The post Yangzijiang appeared first on BPWLC BLOG.


$YZJ Shipbldg SGD(BS6.SI)

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Reply to @BrennenPak : Yep.. change is the only constant in life ;)..lai 1 mooncake for you

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Yangzijiang is now much bigger than Cosco
- Original Post from BPWLC BLOG

Once again, $YZJ Shipbldg SGD(BS6) gave its shareholders a piece of good news that it had won 13 orders of worth $3.88m in Q4 2014. In total, YZJ had won 41 contracts of total worth $1.8b (US$1.42b) for 2014. Cosco Corp (Cosco), on the other hand, pre-empted the market that the company is expected to earn a significant lower earning due to falling oil prices (ST Saturday, 10 January 2015).

Based on the closing price of YZJ and Cosco, YZJ share price is more than twice that of Cosco. With YZJ’s shares outstanding of 3,831,838,000 almost twice that of Cosco of 2,239,244,954, YZJ’s market capitalisation is about 3.6 times that of Cosco. But, just less than 4 years ago around March 2011, YZJ’s market capitalsation is only about 1.56 times that of Cosco.
What’s the reason for the differing fate between the two companies? Could it be that Cosco had been too eager to get into the off-shore business and had mounted a lot of resources in that area for which they found the learning curve too steep? With the falling oil price, it is now more difficult for Cosco to back-pedal. The easy credit that it gave to customers to win contracts had probably back-fired and they have to auction off un-furnised projects. With negative operational cash flow coupled with a record of contract cancellation in the past years, the company is likely to face tougher times ahead.
YZJ, on the other hand, has a deeper pocket. Despite the bleak situation in the shipping industry, YZJ still managed to be profitable. It appeared to have better-quality customers and contract cancellations were surprising low compare to that of Cosco. The positive step to pull away from its non-core business such as micro-financing and to go back to the basics of ship-building should go well with investors in the long run. Furthermore, the significant drop in steel prices would also help to boost its bottom line going forward.
(Brennen Pak has been a stock investor for more than 25 years. He has accumulated a wealth of experience in shares investment. He is the chief trainer of BP Wealth Learning Centre LLP.)

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Recently, the share price $YZJ Shipbldg SGD(BS6) (YZJ) had been poisoned by the news from Tianjing Guoheng Railway that Mr Ren, the chairman of $YZJ Shipbldg SGD(BS6) , has been involved in misconduct in his personal investment. The allegation seemed to be a retaliation by Guoheng’s board of directors, who were resisting against the re-organisation and re-structuring of the Guoheng board. Consequently, $YZJ Shipbldg SGD(BS6) ’s share price took a hit and plumetted more than 10% on 30 May 2014 from $1.13 per share to $1.01. For the following 2 weeks, the share price continued to stay below $1.05.

See morehttp://blog.bpwlc.com.sg/category/shipping...

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$YZJ Shipbldg SGD(BS6) had just released its annual results a few days ago. The 1st qurter results were pretty good showing an increase of 11.4% on a profit of 799.2m yuan (S$160m). Given the relative bleak outlook for shipping, due to glut, I have to say that $YZJ had done pretty well. Just last year alone there were so many bad news in the shipbuilding sector. Comparatively, Rong Sheng, the no. 1 private-sector ship builder has to raise 4 bonds within a matter of one year. HKD1.4b in July 2013, HKD1.0b in December 2013, HKD1.0b in Feb 2014 and HKD1.0b in May 2014. In the meantime, shippers like $NOL was suffering 3-years of consecutive losses and Cosco Corporation was struggling to keep itself afloat as it tries to kick off its rig-building program while trying to hand-prime its slowing shipbuilding activities. With this back-drop, I would personally say that $YZJ had done well, if not very well.

Read more......http://bpwlc.com/blog/2014/05/03/yangzijia...

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