Shares of Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) rose as much as 3.8% on Wednesday, extending gains from the previous trading session after the firm said it is bullish on its first-half net profit.
At 10:27 a.m., Yangzijiang shares were up 2.6% at $1.36 on a volume of 25.6 million shares. The stock was the third highest traded by volume so far.
At 10:27 a.m., Yangzijiang shares were up 2.6% at $1.36 on a volume of 25.6 million shares. The stock was the third highest traded by volume so far.
“The stock has looked a bit oversold over the past weeks. When the company said it can generate 30% year-on-year growth, the market is punting on it,” said Brenda Lee, an analyst at BNP Paribas.
“But the industry outlook, whether it is bulk or containership, is actually deteriorating because there is a serious supply glut coming for 2011,” she added.
“This explains why some shipbuilding companies can register record earnings in the current financial year but it’s all going downhill after this.”
Yangzijiang is confident of reporting on Aug 11 not less than a 30% rise in first half net profit, the firm said on Tuesday, adding that if its share price continues to fall without fundamentals, it does not rule out exercising a share buyback.
It also said that it has diversified its portfolio away from European-based customers, and that it currently has no immediate convertible bond financing plan.
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