The Only Mega-Containership Builder In China

Background

Yangzijiang Shipbuilding (Holdings) Limited is a leading shipbuilding enterprise in China founded in 1956 and the only mega-containership builder in China.

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About 70% of revenue is derived from shipbuilding of container, cargo and other vessels.

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Yangzijiang Shipbuilding

The remainder comes from investments, sales of shipping-related goods and services and trading.

Business Description

Rising iron ore demand, as well as higher rate of ship demolition and a lower rate of global vessel delivery, should sustain the demand for seaborne transportation.

The company’s main products range from medium- to mega-sized containerships, medium-sized multipurpose ships and large bulk carriers with more than one million DWT in shipbuilding capacity.

The shipbuilding industry shows signs of recovery. The outstanding orders as of end 3Q17 were 103 vessels valued at US$4.3bn. YZJ is on track to achieve double the amount of last year for the whole of 2017.

70% of Yangzijiang's revenue comes from #shipbuilding of container, cargo and other vessels

YZJ’s second biggest revenue contributor is ship supplies and materials trading which represented 21% of total revenue in 2016. The company also provides ship demolition and fabrication services as well as charter services with a fleet of 13 bulk carriers.

The third biggest revenue contributor is the interest income on held-to-maturity assets (HTM) and from micro loans services. As of 3Q17, the HTM portfolio size was US$1.6bn.

Leadership

Ren Yuanlin is the current chairman of the board for YZJ. He has won numerous awards including the Ernst and Young Entrepreneur of China mainland in 2011 and was named “The donation person having the most loving heart” of the eighth China Charity Award of Ministry of Civil Affairs.

Ren Litian succeeded his father as the CEO of Yangzijiang #Shipbuilding in 2015

Ren Litian succeeded his father as the CEO of YZJ in 2015. He has experience in managerial positions in Jiangsu New Yangzi Shipbuilding Co., Ltd. before taking on this role. He obtained his Master’s degree from London South Bank University, UK.

World Class Benchmarking

Profitable Growth improved to World Class in the past 12 months. Yangzijiang ranked among the best 148 of 1,480 large Industrials companies globally.

Profitability has stayed in the top three since 2013. Growth jumped to #1 in in the past 12 months from #7.

Yangzijiang #Shipbuilding ranked among the best 148 of 1,480 large Industrials globally

Asset utilization has continuously been in the bottom ranks, while Profit margin always has ranked at #1.

Both Sales growth and Margin change jumped to the top rank in the past 12 months from being #9 and #6 respectively.

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.