Yangzijiang Reports Top and Bottom Line Growth in 1Q12
Yangzijiang Shipbuilding (YZJ) reported a 7 percent increase in 1Q12 earnings that was largely attributable to a 12 percent growth in revenue. YZJ pointed out that that its financial performance was boosted by revenue from its shipbuilding and investment operating arms. YZJ delivered a total of 15 vessels in 1Q12 as revenue from its shipbuilding arm increased by 10 percent to Rmb 3.3 billion. YZJ’s investment arm reported a more pointed increase in revenue as it recorded gains of 45.1 percent as a result of an increase in investments in held-to-maturity financial assets as well as from its micro-finance business. YZJ also reported more borrowings in 1Q12 as it sought to take advantage of the low interest rate environment to strengthen its cash position. In 1Q12, YZJ secured a total of US$206.2 million worth of contracts for seven vessels. Thus, as at 31 March 2012, YZJ’s total order book stood at US$4.5 billion with contracts for 96 vessels.
Significance: In light of a general consolidation phase experienced by the shipbuilding industry, YZJ is seeking to scale up its vessel value chain and build larger and better vessels to maintain its competitive edge.
Stratech’s iFerret Airport System Attains FAA Approval
Stratech Systems announced that it had been given the green light from the US FAA (Federal Aviation Administration) for its iFerret airport system. The FAA had published an assessment report that affirmed the iFerret system fulfills requirements identified in the FAA Advisory Circular (AC) for Airport Foreign Object Debris (FOD) Detection Equipment. The report’s publication is a significant step for Stratech because compliance with the AC is mandatory for US airports acquiring FOD detection equipment. David Chew, Stratech’s executive chairman said that the FAA accreditation was particularly important to Stratech as he pointed out that the iFerret is now officially licensed for sale. Chew remarked that previously airports had to rely on mandated daily manual sweeps, which were inadequate and inefficient to clear FOD off airport runways.
Significance: The approval of the iFerret system thus opens up huge opportunities for Stratech as airports around the world, in particular, in the US, seek to equip themselves with automated FOD detection equipment.
CMA To Develop First Beijing Mall; 1Q12 Profit Up 36.1%
CapitaMalls Asia (CMA) announced that it had attained a 36.1 percent jump in earnings on the back of a 3-fold jump in other operating income to $38.5 million from $8.4 million. The jump was mainly attributable to a $32 million fair value gain on investment properties. Analysts remarked that 1Q12 results were generally in line with expectations because CMA’s earlier acquisitions of Minhang Plaza and Hongkou Plaza will only commence full contribution in 2Q12. Liew Mun Leong, CMA’s chairman, opined that CMA’s key markets in China, Singapore and Malaysia will continue to see growth as economic figures paint an upward trend for each region. Separately, CMA announced its plans to develop its first shopping mall in the south of Beijing, China. The total development cost of the shopping mall is expected to be about $469.2 million. The 39,500 square metre site, which has a land use tenure of 40 years, is located in the Daxing district of Beijing. CMA plans to develop the site into a mid-to high-end seven-storey shopping mall with a total gross floor area of about 122,000 square metres.
Significance: Notwithstanding the unsurprising 1Q12 results, there is some caution in the wind with regards to the latest announcement of CMA’s first Beijing development. Analysts warn of an increased risk of fund-raising as leverage levels are likely to rise above 40 percent.