Broker: CGS International
Date of Report: June 6, 2025
Yangzijiang Shipbuilding Surges on Bullish Technicals; NIO Faces Margin Pressures Amid Fierce Competition
Market Overview: Wall Street Rebounds as US-China Tensions Ease
Global equities experienced a resurgence as market sentiment improved following a positive phone call between Donald Trump and Xi Jinping, which paved the way for renewed trade negotiations. Notably, the S&P 500 approached the 6,000 level after President Trump described the call as “very good,” helping to resolve disputes concerning rare earth exports. The US bond market remained stable after a recent rally, while a rise in jobless claims bolstered expectations of two Federal Reserve rate cuts this year, with the first move anticipated in September. The US dollar weakened, nearing its lowest point since July 2023. Economists are forecasting a slowdown in May payroll growth, with the unemployment rate projected to remain steady at 4.2%.
Yangzijiang Shipbuilding Holdings Ltd: Technical Buy Signal Points to Bullish Reversal
Company Snapshot
Yangzijiang Shipbuilding Holdings Limited is a diversified shipbuilder specializing in a broad array of commercial vessels, including:
- Mini bulk carriers
- Multipurpose cargo vessels
- Containerships
- Chemical tankers
- Offshore supply vessels
- Rescue and salvage vessels
- Lifting vessels
Technical Analysis: Bullish Reversal in Focus
Yangzijiang Shipbuilding (YZJSB) is exhibiting strong bullish momentum, with price action confirming a reversal pattern. The latest technical analysis highlights the following key observations:
| Last Price |
2.31 |
| Entry Price(s) |
2.31, 2.00, 1.90 |
| Support 1 |
2.15 |
| Support 2 |
2.00 |
| Stop Loss |
1.80 |
| Resistance 1 |
2.49 |
| Resistance 2 |
3.34 |
| Target Price 1 |
2.80 |
| Target Price 2 |
2.96 |
| Target Price 3 |
3.10 |
| Target Price 4 |
3.30 |
Key technical signals supporting this bullish outlook include:
- A breakout from a large wedge formation, signaling robust upside pressure.
- Confirmation of an inverted head-and-shoulders pattern, with a breakout from a flag pattern on strong bullish volume.
- Ichimoku indicator showing two out of three bullish crossovers.
- MACD and signal lines remain above the zero line, with a positive histogram.
- Stochastic oscillator continues to rise, supporting upward momentum.
- The 23-period Rate of Change (ROC) has rebounded.
- Directional Movement Index confirms growing bullish strength.
- Volume is expanding healthily, reinforcing the positive trend.
NIO Inc: Competitive Pressures Weigh on Profitability Despite Robust Product Pipeline
Quarterly Financial Highlights
- NIO reported a 1Q25 non-GAAP net loss of RMB 6.3 billion, widening from RMB 4.9 billion in 1Q24, primarily due to increased operating expenses.
Strategic Outlook and Analyst Recommendation
NIO boasts a strong product pipeline, including new offerings under the NIO, ONVO, and Firefly brands. These developments are expected to support sales growth over the medium term. However, the company’s shipment growth is likely to be tempered by intensifying market competition, which continues to pressure margins and profitability.
- The analyst maintains a Hold rating on NIO, with a revised lower discounted cash flow (DCF)-based target price of HK\$30.62.
Analyst and Contact Information
- Analyst: CHUA Wei Ren, CMT
- Contact: +65 6210 8612
- Email: weiren.chua@cgsi.com
CGS International’s Stock Rating Framework
Understanding the rating system is essential for interpreting the recommendations:
| Rating |
Definition |
| Add |
Total return expected to exceed 10% over the next 12 months |
| Hold |
Total return expected between 0% and +10% over the next 12 months |
| Reduce |
Total return expected to fall below 0% over the next 12 months |
The total expected return includes the percentage difference between the target and current price, plus the forward net dividend yield.
Distribution of Recommendations (as of March 31, 2025)
| Rating |
Percentage of Coverage |
Investment Banking Clients (%) |
| Add |
71.0% |
1.3% |
| Hold |
20.9% |
0.7% |
| Reduce |
8.2% |
0.4% |
Out of 551 companies under coverage for the quarter ended March 31, 2025, the majority received an Add rating, reflecting a generally optimistic outlook across covered sectors.
Key Takeaways for Investors
- Yangzijiang Shipbuilding Holdings Ltd is technically positioned for a bullish move, with multiple indicators and momentum signals aligning in favor of further upside. Investors may consider the outlined entry, stop loss, and target levels for potential trading opportunities.
- NIO Inc remains an innovator with a compelling pipeline, but its profitability is under pressure due to increased competition and rising costs. The Hold rating with a revised target price reflects a cautious stance while acknowledging the company’s growth prospects.
- CGS International maintains a rigorous, transparent approach to stock ratings, providing clear definitions and up-to-date coverage statistics for investor guidance.
Disclaimer
All information provided is for informational purposes only and is not intended as an offer, solicitation, or recommendation to buy or sell any securities or financial instruments. Investors are advised to conduct their own due diligence and consult with professional advisors before making investment decisions.
