Partner

Patrick Eng

Sparkill & Co

Equity Bottom-Up

Yangzijiang Shipbuilding / Equity Bottom-Up

<p>Due to COVID-19 the shipbuilding industry in China and perhaps among other countries like, Korea and Japan may shrink to levels that may lead to a golden age in shipbuilding.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/376/original/China+Dragons+and+Ships.jpg?1611539656" class="editor-image img-responsive" data-smartkarma-image-id="184376"></figure></section><p>This is another chapter in our Yangzijiang story. Please review our early chapters on our investment thesis and thoughts:</p><p>I) <a href="https://www.smartkarma.com/insights/the-silver-lining-and-star-in-china-s-shipbuilding-cloud" target="_blank" data-smartkarma-citation="insights:40680" rel="noopener">The Silver Lining and STAR in China’s Shipbuilding Cloud</a> </p><p>II) <a href="https://www.smartkarma.com/insights/yangzijiang-shipbuilding-must-be-clever-to-prosper-in-a-government-regulated-industry-part-2" target="_blank" data-smartkarma-citation="insights:41446" rel="noopener">Yangzijiang Shipbuilding Must Be Clever to Prosper In A Government Regulated Industry (Part 2)</a></p><p>III) <a href="https://www.smartkarma.com/insights/what-s-the-barrier-to-entry-that-benefits-yangzijiang-china-financier-of-last-resort" target="_blank" data-smartkarma-citation="insights:42232" rel="noopener">What's The Barrier to Entry That Benefits Yangzijiang? China Financier Of Last Resort?</a> </p><p>IV) <a href="https://www.smartkarma.com/insights/the-softbank-lng-whale-big-game-changer-for-yangzijiang-shipbuilding" target="_blank" data-smartkarma-citation="insights:43293" rel="noopener">The “Softbank LNG Whale” – Big Game Changer For Yangzijiang Shipbuilding</a> </p><p>V) <a href="https://www.smartkarma.com/insights/yangzijiang-16-billion-of-shadow-banking-loans-a-premier-china-bdc-private-lender" target="_blank" data-smartkarma-citation="insights:44203" rel="noopener">Yangzijiang – 16 Billion Of Shadow Banking Loans – A Premier China “BDC / Private Lender”</a> </p><p>VI) <a href="https://www.smartkarma.com/insights/yangzijiang-china-s-private-credit-shadow-banker-beijing-new-risk-paradigm-debt-default-tailwind" target="_blank" data-smartkarma-citation="insights:45600" rel="noopener">Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm &amp; Debt Default Tailwind</a></p><p>VII) <a href="https://www.smartkarma.com/insights/yangzijiang-happy-new-year-give-us-back-our-stock-or-we-will-pay-you-a-dividend" target="_blank" data-smartkarma-citation="insights:46895" rel="noopener">Yangzijiang – Happy New Year: Give Us Back Our Stock Or We Will Pay You A Dividend</a> </p>

Due to COVID-19 the shipbuilding industry in China and perhaps among other countries like, Korea and Japan may shrink to levels that may lead to a golden age in shipbuilding.This is another chapter in our Yangzijiang story. Please review our early chapters on our investment thesis and thoughts:I) The Silver Lining and STAR in China’s Shipbuilding Cloud II) Yangzijiang Shipbuilding Must Be Clever to Prosper In A Government Regulated Industry (Part 2)III) What's The Barrier to Entry That Benefits Yangzijiang? China Financier Of Last Resort? IV) The “Softbank LNG Whale” – Big Game Changer For Yangzijiang Shipbuilding V) Yangzijiang – 16 Billion Of Shadow Banking Loans – A Premier China “BDC / Private Lender” VI) Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm &amp; Debt Default TailwindVII) Yangzijiang – Happy New Year: Give Us Back Our Stock Or We Will Pay You A Dividend 

Yangzijiang - COVID Accelerating Shipbuilding Consolidation

<p><strong>What Does A Decade Plus Of Dividends Since Going Public Tell Us?</strong></p>
<p><strong>What Does A Share Buyback During A Pandemic &amp; Crisis In Its Industry Tell Us?</strong></p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/676/original/stock+buyback+and+dividends.jpg?1610247446" class="editor-image img-responsive" data-smartkarma-image-id="181676"></figure>
</section>
<p>This is Chapter 7 on Yangzijiang.</p>
<div>
<p>Please review our early chapters on our investment thesis and thoughts:</p>
</div>
<div>
<p>I) <a href="https://www.smartkarma.com/insights/the-silver-lining-and-star-in-china-s-shipbuilding-cloud" target="_blank" data-smartkarma-citation="insights:40680" rel="noopener">The Silver Lining and STAR in China’s Shipbuilding Cloud</a> </p>
</div>
<div>
<p>II) <a href="https://www.smartkarma.com/insights/yangzijiang-shipbuilding-must-be-clever-to-prosper-in-a-government-regulated-industry-part-2" target="_blank" data-smartkarma-citation="insights:41446" rel="noopener">Yangzijiang Shipbuilding Must Be Clever to Prosper In A Government Regulated Industry (Part 2)</a></p>
</div>
<div>
<p>III) <a href="https://www.smartkarma.com/insights/what-s-the-barrier-to-entry-that-benefits-yangzijiang-china-financier-of-last-resort" target="_blank" data-smartkarma-citation="insights:42232" rel="noopener">What's The Barrier to Entry That Benefits Yangzijiang? China Financier Of Last Resort?</a> </p>
</div>
<div>
<p>IV) <a href="https://www.smartkarma.com/insights/the-softbank-lng-whale-big-game-changer-for-yangzijiang-shipbuilding" target="_blank" data-smartkarma-citation="insights:43293" rel="noopener">The “Softbank LNG Whale” – Big Game Changer For Yangzijiang Shipbuilding</a> </p>
</div>
<div>
<p>V) <a href="https://www.smartkarma.com/insights/yangzijiang-16-billion-of-shadow-banking-loans-a-premier-china-bdc-private-lender" target="_blank" data-smartkarma-citation="insights:44203" rel="noopener">Yangzijiang – 16 Billion Of Shadow Banking Loans – A Premier China “BDC / Private Lender”</a> </p>
<p>VI) <a href="https://www.smartkarma.com/insights/yangzijiang-china-s-private-credit-shadow-banker-beijing-new-risk-paradigm-debt-default-tailwind" target="_blank" data-smartkarma-citation="insights:45600" rel="noopener">Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm &amp; Debt Default Tailwind</a> </p>
</div>

What Does A Decade Plus Of Dividends Since Going Public Tell Us?
What Does A Share Buyback During A Pandemic &amp; Crisis In Its Industry Tell Us?



This is Chapter 7 on Yangzijiang.

Please review our early chapters on our investment thesis and thoughts:


I) The Silver Lining and STAR in China’s Shipbuilding Cloud 


II) Yangzijiang Shipbuilding Must Be Clever to Prosper In A Government Regulated Industry (Part 2)


III) What's The Barrier to Entry That Benefits Yangzijiang? China Financier Of Last Resort? 


IV) The “Softbank LNG Whale” – Big Game Changer For Yangzijiang Shipbuilding 


V) Yangzijiang – 16 Billion Of Shadow Banking Loans – A Premier China “BDC / Private Lender” 
VI) Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm &amp; Debt Default Tailwind 


Yangzijiang – Happy New Year: Give Us Back Our Stock Or We Will Pay You A Dividend

Credit

<p>2020 is finally over. We now have to look forward to 2021. I will leave you with one last thought different than the consensus on China’s total social financing (“TSF”) growth. Many still believe that growth in China’s debt to GDP is unproductive. This so-called unproductive use of capital can only lead to non-performing debt. But many are missing other ingredients to dismiss this theory.</p>

2020 is finally over. We now have to look forward to 2021. I will leave you with one last thought different than the consensus on China’s total social financing (“TSF”) growth. Many still believe that growth in China’s debt to GDP is unproductive. This so-called unproductive use of capital can only lead to non-performing debt. But many are missing other ingredients to dismiss this theory.

China: COVID Accelerating China’s Capital Markets–Total Social Financing Should Be Good In A Crisis

Thematic (Sector/Industry)

<p><strong>China - “Doctor Of The Developing World”</strong></p><ol>
<li><strong>Who Is Dr. Chen Wolf Warrior? China’s Vaccine Boring But Beautiful.</strong></li>
<li><strong>What Does The COVID Vaccine Race Do For China?</strong></li>
<li><strong>From Doctor To… What Else…Future China Investment Implications</strong></li>
</ol><p><strong> </strong></p>

China - “Doctor Of The Developing World”
Who Is Dr. Chen Wolf Warrior? China’s Vaccine Boring But Beautiful.
What Does The COVID Vaccine Race Do For China?
From Doctor To… What Else…Future China Investment Implications
 

China Doing What It Does Best – Copying: Making Old Products/Vaccines Better & Cheaper

<p>1. Why Is Beijing Allowing Defaults To Occur? Perhaps New Debt Narrative.</p>
<p>2. What is Yi Gang Of The PBOC Signaling To The Market? Perhaps A New Risk Paradigm Among     Debt Investors</p>
<p>3. How Does All This Benefit Yangzijiang?</p>

1. Why Is Beijing Allowing Defaults To Occur? Perhaps New Debt Narrative.
2. What is Yi Gang Of The PBOC Signaling To The Market? Perhaps A New Risk Paradigm Among     Debt Investors
3. How Does All This Benefit Yangzijiang?

Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm & Debt Default Tailwind

Singapore

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

Frencken Group Limited designs, develops, and produces complex and advanced modules and systems, based on precision mechanics, hardware and software.

Hong Leong Asia Limited manufactures and fabricates precast concrete products, trades and distributes steel and cement products,  The Company also manufactures and distributes refrigerators and freezers, assembles air-conditioners and diesel engines as well as manufactures and sells metal drums and containers, plastic packaging related products, and container components.

China Yuchai International Limited is a holding company.  Through its subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), manufactures, assembles, and sells diesel engines in China.

China Yuchai International Limited (CYD US)

COSCO SHIPPING International (Singapore) Co., Ltd. provides ship building and repairing and marine engineering services. The Company offers bulk, liquefied natural gas, and special purpose carriers, as well as oil tankers. COSCO SHIPPING International serves customers worldwide.

COSCO SHIPPING International (Singapore) (COS SP)

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. The Company's businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces.

InnoTek Ltd., through its subsidiaries, manufactures metal components.  The Company offers metal stamping, commercial tool and die fabrications, sub-assembly work and frame manufacturing.  InnoTek primarily serves customers in Japan and Europe.

World Precision Machinery Limited manufactures and supplies stamping machines and related metal components. The Company's other products include bending, cutting and CNC punching machines.

ST Engineering is a global technology, defence and engineering group with offices across Asia, Europe, the Middle East and the U.S., serving customers in more than 100 countries. The Group uses technology and innovation to solve real-world problems and improve lives through its diverse portfolio of businesses across the aerospace, smart city, defence and public security segments. Headquartered in Singapore, ST Engineering reported revenue of $7.9b in FY2019 and it ranks among the largest companies listed on the Singapore Exchange. It is a component stock of the FTSE Straits Times Index, MSCI Singapore, iEdge SG ESG Transparency Index and iEdge SG ESG Leaders Index.

Samsung Heavy Industries Co., Ltd. manufactures crude oil tankers, container vessels, bulk carriers, cruisers, and passenger ferries.  The Company also produces steel and bridge structures, and material handling equipment.  In addition, Samsung Heavy Industries provides civil engineering, architectural, and plant construction services.

Donaldson Company, Inc. manufactures filtration systems and replacement parts. The Company's products include filters and emission control products for heavy duty mobile equipment, in-plant air cleaning systems, air intake systems for industrial gas turbines, and specialized filters for computer disk drives, aircraft cabins, and semiconductors. Donaldson operates around the world.

AGCO Corporation manufactures and distributes agricultural equipment throughout the world.  The Company sells a range of agricultural equipment and related replacement parts, including tractors, combines, hay tools, sprayers, and forage equipment.  AGCO markets its products under a variety of brand names, including Massey Ferguson, AGCO, Tye, GLEANER, and Hesston.

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

Thermax Ltd manufactures equipment and machinery used to both produce and to conserve energy. The Company operates through a number of divisions, including Boilers, Heat Recovery Steam Generators, Water Treatment Plants and Air Pollution Control Equipment. In addition, Thermax  produces steam and gas turbines and diesel gensets through a number of strategic alliances.

EBARA CORPORATION manufactures pneumatic and hydraulic pumps and related equipment.  The Company's products include fuel, oil, water, and firefighting pumps, as well as steam turbines and boilers.  Ebara Corporation also engineers garbage incinerators, smoke desulfurizers, and other products related to environmental technology.

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

Watts Water Technologies, Inc. designs, manufactures, and sells a line of products to the water regulation and control markets.  The Company has manufacturing plants and distribution channels in the United States, Canada, and Europe, as well as a joint venture in The People's Republic of China.

Chart Industries, Inc. is a global manufacturer of equipment used in the production, storage, and end-use of hydrocarbon and industrial gases. The Company's products include vacuum-insulated containment vessels, heat exchangers, cold boxes, and other cryogenic components.

RBC Bearings Incorporated designs, manufactures, and markets bearing products. The Company offers precision plain, roller, cam followers, couplings, collars, locking, tool holders, shafts, pins, rods, tubes, and ball bearings. RBC Bearings serves industrial, aerospace, and defense markets worldwide.

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

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Yangzijiang Shipbuilding (YZJSGD SP)

Yangzijiang - COVID Accelerating Shipbuilding Consolidation

Yangzijiang - COVID Creating A Shipbuiding Golden Age - Let a "100 Flowers Blossom" but only give enough water to let the chosen ships float.

Patrick Eng

Yangzijiang – Happy New Year: Give Us Back Our Stock Or We Will Pay You A Dividend

Positively damned if you do or damned if you don't! Yangzijiang executes a buyback & dividend. One can participate in the disciplined capital...

Patrick Eng

China Doing What It Does Best – Copying: Making Old Products/Vaccines Better & Cheaper

China Vaccine - using its math, science, and manufacturing strength to play Doctor to the world. They were the clinical trials themselves and now...

Patrick Eng

Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm & Debt Default Tailwind

Yangzijiang, One of China's oldest & largest shadow bank financiers receiving industry developmental assistance from Beijing - In a crisis, shake...

Patrick Eng

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Yangzijiang - COVID Accelerating Shipbuilding Consolidation

Yangzijiang - COVID Creating A Shipbuiding Golden Age - Let a "100 Flowers Blossom" but only give enough water to let the chosen ships float.

Patrick Eng

Yangzijiang – Happy New Year: Give Us Back Our Stock Or We Will Pay You A Dividend

Positively damned if you do or damned if you don't! Yangzijiang executes a buyback & dividend. One can participate in the disciplined capital...

Patrick Eng

China: COVID Accelerating China’s Capital Markets–Total Social Financing Should Be Good In A Crisis

China's Total Social Financing should reap the rewards similar to investing in a crisis COVID is accelerating China's financial markets and deepening.

Patrick Eng

China Doing What It Does Best – Copying: Making Old Products/Vaccines Better & Cheaper

China Vaccine - using its math, science, and manufacturing strength to play Doctor to the world. They were the clinical trials themselves and now...

Patrick Eng

Yangzijiang–China’s Private Credit/Shadow Banker: Beijing New Risk Paradigm & Debt Default Tailwind

Yangzijiang, One of China's oldest & largest shadow bank financiers receiving industry developmental assistance from Beijing - In a crisis, shake...

Patrick Eng