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Yangzijiang calls for trading halt after shares plummet 20% on heavy volume

YANGZIJIANG Shipbuilding (YZJ) has requested an immediate trading halt on Thursday morning pending the release of an announcement, shortly after the Singapore Exchange (SGX) flagged “unusual price movements” in the company’s shares.

The counter had fallen 20 per cent or 26 Singapore cents to S$1.04 with some 83.7 million shares traded as at 11.30am, making YZJ the most heavily traded security on the Singapore bourse.

In a letter filed at 11.15am, the bourse operator asked the shipbuilding and offshore firm whether it was aware of any information not previously announced which might explain the trading activity. SGX also asked the company to confirm its compliance with listing rules.

Before Thursday, YZJ’s latest regulatory filing was on Monday, when it posted its financial results. Its second-quarter net profit had fallen 6 per cent year on year to 936 million yuan (S$186 million), while rising raw material and labour costs cut gross profit margin for the shipbuilding business to 18 per cent, from 21 per cent a year ago.

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On Monday, the company also gave an update on its joint venture (JV) with Japanese shipbuilding yards, Mitsui E&S Shipbuilding and Mitsui & Co. YZJ said that the JV was prepared to start operations this month, after being incorporated in China with a registered capital of US$99.9 million.

YZJ holds a 51 per cent stake in the JV. The consideration for the investment will be US$50.9 million, to be fully paid in cash from YZJ’s internal resources.