Yangzijiang head clears air on donation
He gave dividends to foundation, and not stake in firm
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He gave dividends to foundation, and not stake in firm
Lynette Khoo
15 June 2012
A media report in Ireland saying that the chairman of Yangzijiang Shipbuilding has donated a 27.8 per cent stake in the group to a charity foundation turned out to be a false alarm.
Ren Yuanlin actually donated the dividends derived from his 26 per cent stake in Yangzijiang for the financial year ended Dec 31 to Yuanlin Charity foundation.
Mr. Ren has also pledged all future dividends to be received from his stakeholding to this foundation that he started to help senior citizens in China, Yangzijiang’s investor relations firm Financial PR clarified yesterday.
“As a responsible businessman, I firmly believe in doing my part and contributing back to society,” Mr. Ren told BT. “My involvement in Yangzijiang has put me in a position capable to take action on my beliefs.
“To ensure that the Yuanlin Charity Foundation receives a reasonably stable inflow of donations, I have not disposed of my shareholdings but have instead pledged my share of dividends in FY11 and all future dividends I will receive based on my shareholdings in Yangzijiang towards this cause.”
Yangzijiang had declared 5.5 Singapore cents of dividends for fiscal 2011 ended Dec 31, which would have translated to some $55 million in dividends for Mr. Ren based on his stakeholding.
Mr. Ren’s philanthropic efforts caught the eye of the Irish Times newspaper, but the report incorrectly stated that Mr. Ren donated US$750 million worth of shares or a 27.8 per cent stake in Yangzijiang in March this year to Yuanlin Charity Foundation.
This would have represented some 68 per cent of Mr. Ren’s wealth. He was ranked 84th in Forbes Billionaires list for China in 2011 with a net worth of US$1.1 billion.
The misinformation was carried by an online portal, Investor Central, which questioned the philanthropic decision and the potential impact of this move on Yangzijiang’s share price.
Shares of Yangzijiang slipped 1.5 per cent to 99.5 cents yesterday.
Yangzijiang has been the most profitable S-chip or Chinese company listed here, with net profit rising 6.6 per cent to one billion yuan for the fiscal first quarter ended March 31 as it recognised more revenue from shipbuilding contracts and its ship demolishing business.
One of its industry peers, Dongfang Shipbuilding, however, has recently gone belly up and been delisted from the London Stock Exchange.
Reuters quoted industry executives as saying that as many as half of China’s 1,600 shipbuilding companies are expected to go bankrupt or be acquired by larger rivals in the next two to three years and only the biggest Chinese shipyards such as China Shipbuilding Industry Corp, China Rongsheng Heavy Industries and Yangzijiang Shipbuilding may survive.
Yangzijiang’s stock counter has a “buy” call from UOB KayHian, and an “outperform” rating from CIMB given its cheap valuation and imminent entry into rig building. It has a “reduce” call from Nomura, which cited weak pricing and lacklustre demand for new shipbuilding orders.