[photopress:guangzhou_shipyard.jpg,full,alignright]Guangzhou Shipyard International, China’s only publicly- traded shipbuilder is going to take some money out of its piggy bank and invest RMB2 million in mainland shipping-related companies at their initial public offering stage.
Advance payments on 35 new orders last year pushed the net balance for Guangzhou Shipyard to RMB2.6 billion. Note the investment money is in millions, the advances are in billions. Important difference.
Last year, the state-owned company bought 12 million shares of China Merchants Bank and 10 million shares of China Merchants Shipping shares when those firms floated shares. The arrangements have apparently been made through China Merchants Bank.
The company has made a paper profit of nearly RMB200 million on the two stocks but apparently plans to hold the stakes as long-term investments.
The company has signed at least RMB6 billion worth of new contracts for the next three to four years. BNP, the French bank, wrote a note: ‘We remain bullish on Guangzhou Shipyard’s earning outlook in the next three years, in view of its four years of order backlog and strong pricing and margin trend.’ Seems reasonable.
Source: The Standard