Yangzijiang on a rough ride with US$3.4b order book

2H13 may be a very tough time.

According to OCBC, despite stiff competition in the shipbuilding industry, YZJ secured US$360m worth of new orders to build four units of 10,000 TEU containerships in Jan 2013 after Seaspan exercised its options.  

"We are estimating single-digit gross profit margins for these contracts. Management has indicated that the group would be willing to take on orders even if they are near break-even levels," OCBC said.

The commercial shipbuilding industry is still in its down cycle and the operating environment continues to be difficult and challenging.

"We still expect 2H13 to 1H14 to be the most difficult period for the group, based on its order book (US$3.4b as at 22 Feb 2013) and delivery schedules," OCBC said.