(Stocks Discussion) SGX: Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)?

1) Cyclical Industry. As it is not in my circle of competence, I wouldn't go in. If you know this industry well and know the cycles, you can of course go ahead.

2) The numbers look great, my only concern is that their margins have been coming down over the years as they scaled up. So think about this, the more revenues you earn, your profits grow less proportionately.

I think Isaac did a great job in showing the numbers :)

As someone who work in the maritime industry, the shipbuilding industry a less than ideal way to be exposed to heavy industrials long-term for the common mum-and-pop retail investors.

The shipbuilding industry is ultimately dependent on the dry/wet bulk freight industry whereby freight revenue is volatile, unpredicatable and had been saddled with oversupply for some time. Even experienced shipping veterans had made several costly mistakes betting on the fortune of the freight trends. Its not a transparent market. Most times, it is mainly sentiment that driven million dollars transactions. Seem crazy but thats reality.

When freight drop, shipowners will go back to shipyards and renegotiate those backlog shipbuilding contracts and try to reduce/cancel them. So take those backlog orders, free cash flow of a particular year with a very small pinch of salt.

There are much better, fundamentally stronger industrial stock plays such as CAT/UTC/3M etc out there to consider.