🚨 Yangzijiang Financial (YF8) Analysis: The "Hollow" Turnaround 🚨
$YZJ Fin Hldg(YF8.SI)$ The Big Picture:
On paper, YZJ looks like it's recovering. Profits are up, and they are pivoting away from risky China debt. But in reality, the "quality" of the business is getting weaker, and they are about to give away their best asset.
The 3 Red Flags You Need to Know:
1. The "Paper Profit" Trick 📄
The recent profit surge wasn't because they sold more or lent more money. It was driven by "accounting reversals" (taking back money they previously set aside for bad debts) and government grants. If you strip those one-time gains out, the core lending business is actually shrinking.
2. The Cash Flow Problem 📉
While net profit looks positive, the actual cash generated from operations turned negative (-$10.6M) in the first half of 2025. Why? Because the new Maritime business is expensive to run.
3. Losing the Growth Engine 🚢
The Maritime (shipping) segment was the only part of the company showing real growth (income up 82%). Now, they are spinning this off into a separate entity.
👉 The Risk: If you stay invested in the parent company (YF8) after the spin-off, you are losing the high-growth shipping business and keeping the shrinking China loan portfolio.
The "New" Leadership Reset:
The old Chairman left, and the board has been overhauled. This usually signals a "Kitchen Sink" moment—where the new team cleans up all the bad news at once. Expect more write-downs before things get better.
The Bottom Line:
This is a "Hollow Transformation." The headline numbers look good, but the core business is hollowing out. Once the shipping business is spun off, YF8 will have to prove it can make money in Southeast Asia—something it hasn't successfully done at scale yet.
⚠️ Watch This: Post-Spin-Off Income.
If the remaining company can't grow its interest income by at least 20% quickly, the dividend payouts could be at risk.
Verdict: Caution advised. You might be buying a shell that just gave away its pearl.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
YZJ Fin is not empty:
• It still has substantial NAV
• It still generates investment income
• It still has capital allocation optionality
A truly hollow entity trades at 0.1–0.2× NAV.
YZJ Fin trades at ~0.36× — meaning the market is skeptical, not dismissive.
Better load. No bad news. Just wait for results announcement. Big profits 🙏🏻