Yangzijiang shareholders vote overwhelming in favour of investment arm spin-off

$YANGZIJIANG SHIPBLDG HLDGS LTD(BS6.SI)$

Shareholders of Yangzijiang Shipbuilding (Holdings) have voted overwhelmingly in support of the plan to spin off the company's investment arm for its own listing.

At an EGM held earlier today, just 1,400 shares were cast against the proposal to spin off the company, versus 2,999,040,481 shares in favour.

Yangzijiang Financial Holdings (YFH), as the investment arm is called, will start trading on April 28.

Eligible Yangzijiang shareholders will receive their YFH shares on April 27, which follows an ex-entitlement date on April 22.

The second proposal to distribute shares of YFH as dividend in specie to existing Yangzijiang shareholders, similarly received clear approval. 2,999,100,481 shares were cast in favour, versus 21,400 shares against.

YFH plans to acquire GEM Asset Management, which holds a capital markets services licence, by end of this month.

YFH will have an initial book value of some RMB20 billion, or $4.25 billion, or

Yangzijiang shares up 20.74% year to date.

Analysts said that the investment company is expected to be listed by the end of April, with plans to deploy S$1 billion in its investment and fund/wealth management business.

The company plans to grow this part of the business, while paring down its debt investment business after the restructuring.

Yangzijiang Financial Holdings will focus on making strategic investments in the shipping industry, new economy sectors, student housing and data centres, as well as clean and new energy, noted the analysts.

As of Dec 31, 2021, its investment portfolio comprises 12 fund investments managed by 12 general partners in China, covering 23 projects with an aggregate invested amount of 4.6 billion yuan (S$980 million).

It is also currently undergoing negotiations with third parties on 6 fund management projects spanning private equity, fixed income and real estate, as well as private investment in public equity.

With the S$1 billion injection, Lim and Tan conservatively estimate that Yangzijiang Financial Holdings' total income will grow by 7 per cent from FY2023 to FY2024.

As it establishes a track record for growing its assets under management outside of China, its valuation could be rerated to 12 times the price-to-earnings ratio.