I am certainly disappointed with Cosco results, and I think YZJ share price was dragged down along with the decline of Cosco. Another shipbuilding company STX was also in trouble. SembMarine had a surprising good 1Q2013 but then again it is in the high margin oil rig and drill ship business.
I think the shipbuiding industry still has a long way towards recovery.
No wonder Yangzijiang is so soft recently, the tide is going out, but YZJ is a competitor and the consoldation of the marine industry while painful might not be such a bad thing and will bring the sector into equlibirum again.
Have already accumulate YZJ further and will accumulate YZJ further if it goes on to fall another 10-15%. From what i read, many companies are taking advantage of the low ship building price to order new ships. YZJ has orders till 2015, and has financial clot to last the winter.
Ther is a surge in orders in the first quarter for china shipyards, a lifeline for many as many would go bust as they have no delivery orders for the rest of the year, YZJ new orders in terms of bulk carriers and containers is no small order, and will give them breathing space till early 2015.
I am not so sure about it diversifying into ship breaking and O&M sector thou. but these segments just take up a very small part of its profits.
fifth year of downturn, hopefully only 2 more to go...
NextInsight
a hub for serious investors
