“Operatingconditions and outlook in the Chinese shipbuilding sector remain challenging,due to declining new orders, falling ship prices, weak vessel financing andintensifying competition amongst Chinese yards,” Deutsche Bank said.
Thebrokerage cut its target price for Yangzijiang to SGD1.10 from SGD1.20, keptits ‘hold’ rating, and lowered its new order assumptions in 2012-2014 by between13% and 33%.
Italso lowered Cosco’s target price by just over 10% to SGD1.00, maintained its ‘hold’rating and cut its new order assumptions for 2012-2013 by between 11% and 17%.
Asa result, the German bank trimmed its net income estimates for the shipbuilderby up to 9.4% over the same period.
Sharesof Yangzijiang have risen 10.4% so far this year, while Cosco has gained 9%this year, compared with the FT ST Industrial Index’s 13.7%.
OnMonday, China Rongsheng Heavy Industries warnedshareholders that it expects to report a weak performance for the first half of2012.
China’s largest privately-owned shipbuilderblamed the poor interim results performance on the “decline in the shipbuildingmarket.”
It said: “Orders and the prices of shipshave dropped sharply as compared with last year, which has resulted in thedecrease in profits.”
Recent media reports from Hong Kong say that up to 90% of China’sshipyards have not won a newbuilding order this year.
