Yangzijiang BUY Target Price $2.42 by OCBC

OCBC Investment Research has raised its target price on Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) to $2.42 from $2.36 and maintained its buy rating.

Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) said on Thursday its first quarter net profit rose 63% from a year ago to 954.9 million yuan ($179.9 million).

OCBC said Yangzijiang's net profit was higher than expected, boosted by better gross profit margins. The firm said about 55% of its total order book comprises high-margin vessels and it is confident about sustaining margins in 2011-2012.

Yangzijiang also confirmed that it intends to continue to invest in held-to-maturity financial products. OCBC said this is currently a lucrative business, but a sudden dip in the Chinese stock market may affect the value of the collateral.