Yangzijiang Financial Holding

[weijian]

Since it declared a 200mil SBB program 2 years ago, YZJFH has completed ~80% of it. On VB.com, there was previously some discussion on the merits of continuing SBB post FY24 results. 2 weeks ago, I calculated that If YZJFH were to restart SBB at then prices, the value would be earnings yield of ~10% pro forma FY24 results. With this treasury share placement, the earnings yield can be inverted to imply that cost of equity=10%.

The reasons below do not pass my smell test (at least). But I reckon Chairman Ren probably recognizes that YZJFH is "a closed end fund". There are not a lot of opportunities to scale up capital unlike when it was coupled with ship building. And when we look at the past 2 years of cashflow statement, the Maritime Fund (treated as a subsidiary) attracted 150mil of outside capital (LP) and based on an estimation of its capital base of ~580mil, YZJFH's GP share is close to 75% which is really high. The action of placing out your treasury shares at 10% cost of equity may also implement that this GP:LP ratio isn't going to change much.

Yangzijiang Financial places out treasury shares to accelerate growth in maritime investments

Further, as the Sale Shares are Shares held in treasury, they are not income-generating and constrain the Company’s capital efficiency. The Proposed Sale allows the Company to monetise these shares at a premium to their historical acquisition cost, thereby unlocking their dormant value.

The Proposed Sale also strengthens the capital base of the Company and increases the Company’s public float, which will improve the level of trading liquidity of its Shares. This will in turn enable the Company to further attract institutional investors and stabilise its market performance.

https://links.sgx.com/FileOpen/Press%20R...eID=838066

[Big Toe]

Previously explained why the need to keep a significantly large cash hoard for YZJ F(and for ourselves as well).
The next few days/weeks/months or even 1-2 years is a sweet time to start deploying them.

I have progressively started buying bearing in mind the trade war may get much worse.
And that I may run out of ammo before things starts to get better.

[CY09]

Please note shipping is cyclical. 3 years boom and 7 years bane mainly.

I would not want to be deploying so much funds into maritime to try own luck. Instead if one uses the cash to buyback shares at 0.650-0.7 book value. The accretivie gain is 50-53% which is 5 years worth of maritime funds returns. As the saying goes, a bird in hand is worth two in the bush. What's more when the bird in hand is 5 times the value of each bird in the bush.

See you at upcoming AGM, I will be attending it will be raising the topic of share buyback and their debt invesmtent growing under performing loan portfolio as a proportion. See you guys at the AGM (if anyone is attending)

<Vested Core position>

[Big Toe]

Nothing will be set in stone, especially when trump is around. Just when I finished the post, trump announced a pause at the same time upping his game with China. The worst maybe over but heaps of uncertainty remains. (translated to plenty opportunities ahead)

In shipping, there are so many different ways money can be put to work, ie niches. In every industry there will be niches(of much much smaller market size) where returns can be above average. And while Chairman Ren says it is for shipping, cash do not have to be confined to just be just shipping if another great opportunity presents itself. I dont think SBB is a good idea at this point.

Wont be attending AGM but I do greatly appreciate all the effort of everyone posting their views and what transpired at the AGM.

[CY09]

https://www.tradewindsnews.com/bulkers/y...-1-1805526

Orders for ship bulkers and from a china ship builder. With the recent spate of orders from China shipyards by YZJFH, Yangzijiang financial seems to be growing into a ship owner. Reminds me more of First Ship Lease trust and rickmers model, except without leverage