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Yangzijiang Shipbuilding Holdings Ltd: Resilient Growth Amidst Industry Challenges and China’s Shipbuilding Ascendancy

Overview: Navigating Choppy Waters with Strategic Excellence

Yangzijiang Shipbuilding Holdings Limited (YZJSGD SP) stands as a leading force in global shipbuilding, renowned for its diverse capabilities spanning commercial vessels, mini bulk carriers, cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels. As the maritime sector experiences industry headwinds and volatility, Yangzijiang’s strategic investments, robust order book, and operational excellence position the company as a resilient outperformer.

Record Profit Growth Despite Revenue Headwinds

Yangzijiang Shipbuilding delivered a remarkable financial performance in the first half of 2025 (1H25), with net profit surging 36.7% year-on-year to RMB4.2 billion (S\$752.6 million). This achievement stands out even as total revenue dipped by 1.3% to RMB12.9 billion. The company’s strong profitability was driven by a sharp expansion in net margins, climbing to 32.5% from 23.4% a year earlier, underpinned by higher contributions from associated companies and joint ventures.
Key highlights include:

• Significant contributions from Yangzi-Mitsui Shipbuilding (RMB320 million) and Tsuneishi Zhoushan (RMB160 million), following a strategic 34% equity stake acquisition.
• Diversification through partnerships and associate stakes acts as an effective earnings stabilizer, offsetting revenue softness from lower-value oil tanker contracts and weaker shipping charter rates.

Robust Order Book Provides Multi-Year Earnings Visibility

Despite a slowdown in new order wins to just US\$537 million in 1H25 (compared to US\$3.3 billion in the comparable period last year), Yangzijiang maintains an outstanding order book of US\$23.2 billion. This backlog stretches through 2029 and beyond, offering stable earnings visibility for years to come.
Additional points:

• Roughly 85% of new contracts in the period were for container vessels, reflecting sustained demand for Yangzijiang’s core products even as global shipbuilding orders contracted 54% year-on-year in the first half.
• Management remains confident in filling remaining 2028-2029 delivery slots, predominantly for small to mid-sized vessels, supporting medium-term growth prospects.
• This substantial backlog positions Yangzijiang to accelerate orderbook growth once global trade volumes and tariff uncertainties stabilize.

Strategic Diversification: Earning Stability from Partnerships

Yangzijiang’s proactive acquisition of a 34% equity stake in Yangzi-Mitsui Shipbuilding and Tsuneishi Zhoushan has proven to be a shrewd move, bolstering earnings despite industry softness. These investments:

• Stabilize earnings through diversified contribution streams.
• Mitigate the impact of lower-value oil tanker contracts and declining shipping charter rates.
• Enhance Yangzijiang’s capabilities across a broader range of vessel types.

China’s Shipbuilding Industry: Dominance Cemented by Consolidation

The broader Chinese shipbuilding industry continues to consolidate its global dominance, capturing 51.7% of worldwide completions and a staggering 68.3% of new orders in 1H25. The ongoing CSSC-CSIC share-swap merger is a game-changer:

• Set to create the world’s largest listed shipbuilder by assets and revenue.
• Expected to streamline operations and cut costs by up to 10%.
• Enhances competitiveness in high-end vessel segments such as LNG carriers and mega container ships.

For Yangzijiang, operating alongside a larger state-owned champion presents both challenges and opportunities. While competition may intensify, the strengthened Chinese shipbuilding ecosystem offers improved supply chain efficiency and greater global credibility—ultimately providing a supportive backdrop for Yangzijiang’s ongoing growth.

Latest Results: Strong First Half Performance in 2025

In 1H25, Yangzijiang Shipbuilding reported:

• Revenue of RMB12.88 billion (down 1.3% YoY).
• Net profit of RMB4.18 billion (up 36.7% YoY).
• Secured new contracts worth US\$537.2 million (S\$690 million) for 14 vessels, with approximately 85% for container ships.
• Outstanding order book raised to US\$23.2 billion, scheduled for delivery through 2029 and beyond.

Investment View: BUY Recommendation and Technical Levels

Yangzijiang Shipbuilding’s proven resilience, strategic investments, and multi-year earnings visibility make it a compelling investment opportunity. The stock is recommended as a BUY at an entry price of 2.84, with a target of 3.14 and a stop loss at 2.69.

Key Takeaways for Investors

• Yangzijiang Shipbuilding is weathering industry headwinds through strategic partnerships, operational excellence, and a robust, multi-year order book.
• China’s shipbuilding industry consolidation is a powerful tailwind, supporting Yangzijiang’s competitive positioning.
• The company’s strong profitability and earnings stability offer attractive upside for long-term investors.

Conclusion: Positioned for Sustainable Growth Amid Industry Transformation

Yangzijiang Shipbuilding Holdings Ltd exemplifies resilience, adaptability, and strategic foresight in the face of industry volatility. With a record profit surge, stable earnings from diversified partnerships, and a commanding order book, the company is poised to benefit from China’s shipbuilding leadership and industry consolidation. For investors seeking exposure to global shipbuilding with robust fundamentals, Yangzijiang stands out as a top choice for sustainable long-term growth.