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It has been ~2.5years since YZJFH (Finance Holdings) split from its parent YZJSB (Ship Building). And in the next 2 weeks, YZJMD (Marine Development) will again split from YZJFH. The introductory document was recently released and I finally had a chance to review it. Some notes:
(1) Raising a placement of ~5.2mil at ~NAV. This is much smaller than previously imagined by OPMIs. So is it because there isn't enough demand? Or simply Chairman Ren is just doing a token rise and helping to signal/anchor what YZJMD should trade at?
(2) YZJMD will have a fleet of 76 vessels (wholly/co-owned) at avg age of 7 years. A vessel's end of life is ~25-30years, so the avg fleet age is young. The business of YZJMD will be maritime investments, non-maritime investments and cash mgt. Based on FY24/1H25, YZJMD accounted for 44-46% of the original combined entity's PATMI. It will follow the same dividend policy, ie. paying out at least 40% of NP.
(3) Balance sheet. This is probably the more interesting part. Based on 1H25 FS, YZJMD will take (a) 45% of the cash, (b) 92% of the financial assets at FVTPL, © 6% of DI (all are current), (d) 50% of JV/associate, (e) All the receivables+PPE (maritime assets/charter leases) --> In summary, takes away 53% of the equity, or ~59cents sgd per share.
(4) CMS license (GEM Asset Management) is moved to YZJMD (due to Maritime Fund) together with some of the non-maritime assets. There will be some overlap between YZJFH and YZJMD but the overlaps will become passive vehicles and wind down in the next 5-7years. This explains why YZJMD is taking some of the associate and FVTPL assets when much of these assets are less related.
SGX announcement:
https://links.sgx.com/1.0.0/corporate-an...2a791c8526
(1) Raising a placement of ~5.2mil at ~NAV. This is much smaller than previously imagined by OPMIs. So is it because there isn't enough demand? Or simply Chairman Ren is just doing a token rise and helping to signal/anchor what YZJMD should trade at?
(2) YZJMD will have a fleet of 76 vessels (wholly/co-owned) at avg age of 7 years. A vessel's end of life is ~25-30years, so the avg fleet age is young. The business of YZJMD will be maritime investments, non-maritime investments and cash mgt. Based on FY24/1H25, YZJMD accounted for 44-46% of the original combined entity's PATMI. It will follow the same dividend policy, ie. paying out at least 40% of NP.
(3) Balance sheet. This is probably the more interesting part. Based on 1H25 FS, YZJMD will take (a) 45% of the cash, (b) 92% of the financial assets at FVTPL, © 6% of DI (all are current), (d) 50% of JV/associate, (e) All the receivables+PPE (maritime assets/charter leases) --> In summary, takes away 53% of the equity, or ~59cents sgd per share.
(4) CMS license (GEM Asset Management) is moved to YZJMD (due to Maritime Fund) together with some of the non-maritime assets. There will be some overlap between YZJFH and YZJMD but the overlaps will become passive vehicles and wind down in the next 5-7years. This explains why YZJMD is taking some of the associate and FVTPL assets when much of these assets are less related.
SGX announcement:
https://links.sgx.com/1.0.0/corporate-an...2a791c8526
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
