Yangzijiang seeks trading suspension of shares on SGX

Shipbuilding group Yangzijiang asked for the trading of its shares to be suspended immediately, according to a company announcement on the Singapore Exchange (SGX) yesterday.

The request was submitted by Yangzijiang executive chairman Ren Yuanlin, 11 minutes after the SGX posted a query about the company's trading activity.

SGX vice-president and surveillance head Kelvin Koh said the bourse had noted unusual price movements in the company's shares and reached out to Yangzijiang for an explanation.

It also queried the company about compliance with the listing rules.

Yangzijiang has yet to make public its answers.

The counter had fallen 20 per cent, or 26 cents, to $1.04, with some 83.7 million shares traded as at 11.30am, making Yangzijiang the most heavily traded security on the Singapore bourse.

The group posted a net profit of 936 million yuan (S$184 million) in the second quarter of this year, down 6 per cent from the same period a year earlier, according to an earlier media report.

Revenue in the three months ended June 30 was seven billion yuan, down 12 per cent.

The core shipbuilding business generated revenue of 3.1 billion yuan, down from 5.2 billion yuan in the same period a year earlier, as 18 vessels were delivered instead of 20.

Earnings per share was 23.73 renminbi (RMB) cents, down from 25.08 RMB cents in the second quarter of last year.

The key risks to the company are the appreciation of the greenback and a hike in steel costs, DBS analyst Ho Pei Hwa said in a report earlier this week.

"Revenue is denominated mainly in the US dollar, and only half is naturally hedged," she said.

"If the net exposure is unhedged, every 1 per cent depreciation in the greenback could lead to a 2 per cent decline in earnings.

"Every 1 per cent rise in steel costs, which account for about 20 per cent of COGS (cost of goods sold), could result in a 0.8 per cent drop in earnings," she added.

A version of this article appeared in the print edition of The Straits Times on August 09, 2019, with the headline 'Yangzijiang seeks trading suspension of shares on SGX'. Print Edition | Subscribe