Maintain Outperform with higher target price of S$2.69 (from S$2.57). Yangzijiang had secured US$415m worth of contracts from Sep 10 to Dec 10, comprising 15 bulk carriers with delivery over 2011-13. This brings 2010 contracts won to about US$1.5bn. We raise our order intake for 2011 from US$1bn to US$1.5bn on the back of the strong order momentum in 4Q10. Consequently, we lift our earnings estimate by 5% for FY12 and our target price to S$2.69, still based on 14x CY12 P/E, in line with regional peers. Yangzijiang remains our top pick in the sector with a high-conviction Outperform rating given its earnings-growth resilience and proven tight execution. Catalysts could include stronger-than-expected order wins and higher revenue from productivity gains, in our assessment.
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