UOB Kay Hian
Date of Report: Thursday, 4 September 2025
Yangzijiang Shipbuilding: Record Order Wins and Earnings Visibility Make for a Compelling Investment
Overview: Yangzijiang Shipbuilding Surges Ahead with Robust Orderbook and Strong Financials
Yangzijiang Shipbuilding (YZJSGD SP), China’s largest private shipyard, is making waves in 2025 with record-breaking order wins, resilient margins, and a rock-solid balance sheet. With operations dating back to 1956 and a global clientele spanning North America, Europe, and Asia, Yangzijiang is well-positioned to capitalize on elevated demand for containerships, bulk carriers, and LNG vessels.
Broker: UOB Kay Hian maintains a BUY rating on Yangzijiang, raising the target price to S$3.60, reflecting a 17.6% upside from the latest share price of S$3.06.
Key Investment Highlights
- Record New Orders: Yangzijiang secured US\$0.92 billion in new contracts for 22 vessels, 70% higher than 1H25’s order wins.
- Revenue Visibility: Current contracts underpin earnings through 2027-28, with new deliveries scheduled for 2027-28.
- Attractive Valuation: 2026F PE at 7.6x and EV/EBITDA at 3.8x, with strong ROE (over 23%) and a growing dividend yield.
- Financial Strength: Net cash position of Rmb18.3 billion, representing about one-third of market cap, and gross gearing improved to 21.7%.
- Resilient Market: Containership charter rates hit post-Covid highs, driven by tight vessel supply and robust demand for units above 2,000 TEU.
Share Price and Performance Snapshot
| Share Price (S\$) |
Target Price (S\$) |
Upside (%) |
Market Cap (S\$M) |
Market Cap (US\$M) |
52-Week High/Low (S\$) |
| 3.06 |
3.60 |
17.6 |
10,350.6 |
8,051.8 |
3.32 / 1.80 |
Recent Orderbook Developments Boosting Earnings Visibility
Yangzijiang announced US$0.92 billion in new orders for 22 vessels in 2H25—a substantial 70% jump over 1H25’s order wins. In the first half of the year, YZJ secured contracts for 12 container vessels and two bulk carriers, totaling US$537 million and bringing year-to-date new orders to US$1.5 billion.
The company’s new contracts will not contribute to 2025 earnings, as delivery is scheduled for 2027-28. This enhances earnings visibility well into the future, rewarding patient investors with sustained profit growth and dividend potential.
Resilient Container Market Trends
Despite macroeconomic and geopolitical headwinds, the container market remains robust:
- Charter rates have soared, up 80% year-on-year in 1H25.
- Clarksons’ Containership Timecharter Rate Index hit post-Covid highs (196–198 points in July).
- Tight vessel supply, especially for ships over 2,000 TEU, is fueling demand for newbuilds and extensions.
- All of YZJ’s 2025 containership orders are for vessels 4,500 TEU or smaller, targeting the most in-demand segments.
Financial Performance and Valuation Metrics
Yangzijiang’s financial results demonstrate robust growth, efficient operations, and prudent capital management.
| Year (Rmbm) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
24,112 |
26,542 |
28,568 |
37,688 |
40,500 |
| EBITDA |
5,274 |
7,224 |
8,977 |
10,282 |
10,785 |
| Net Profit (adj.) |
4,102 |
6,634 |
8,207 |
8,755 |
9,164 |
| EPS (Fen) |
104.7 |
169.3 |
209.4 |
223.4 |
233.8 |
| PE (x) |
16.2 |
10.0 |
8.1 |
7.6 |
7.3 |
| Dividend Yield (%) |
1.6 |
2.6 |
3.6 |
3.9 |
4.1 |
| ROE (%) |
21.3 |
28.1 |
27.3 |
23.2 |
20.1 |
| Net Margin (%) |
17.0 |
25.0 |
28.7 |
23.2 |
22.6 |
Industry Context: Newbuild Market Moderation and Green Vessel Demand
- Order pace slowdown in 2025 is sector-wide, not company-specific, reflecting macro/geopolitical uncertainty and some market softness.
- Newbuild prices remain historically high, with the Clarksons NB Price Index 15% above its five-year average.
- Environmental regulations are accelerating demand for alternative-fuel vessels, with 55% of new orders in this category.
Balance Sheet Strength and Capital Allocation
Yangzijiang boasts a formidable net cash position of Rmb18.3 billion (S$3.28 billion), about one-third of its market capitalization. Gross gearing fell to 21.7% at end-1H25 from 25.8% at end-2024, underlining robust cash flow generation. Management has signaled this financial firepower enables strategic investments, capacity expansion, and shareholder returns, though the broker would prefer more generous dividends.
Earnings Outlook and Risks
UOB Kay Hian has kept its earnings forecasts unchanged. Key risks to the investment thesis include:
- Worsening US-China trade relations
- Operational challenges in shipbuilding
- Adverse RMB/USD exchange rate movements
- Rising steel prices in China, which could squeeze margins
Valuation, Recommendation, and Catalysts
UOB Kay Hian reiterates its BUY recommendation, raising the target price to S$3.60 (from S$3.45) based on a PE multiple of 8.5x, which is one standard deviation above the 10-year average. This premium is justified by earnings visibility into 2028, a proven track record, and strong international customer relationships.
- 2026F PE: 7.6x
- 2026F EV/EBITDA: 4.8x
- 2026F ROE: Over 23%
Potential Catalysts:
- Consistent execution of orderbook and maintenance of shipbuilding margins above 30%
- Winning contracts for higher-margin vessels, such as dual-fuel containerships and LPG/oil tankers
Orderbook and Revenue Trends
| Period |
Order Value (US\$m) |
Vessel Count |
Key Vessel Types (Capacity) |
| 1H25 |
537 |
12 containerships, 2 bulk carriers |
8 x 1,700 TEU, 2 x 3,000 TEU, 2 x 4,488 TEU, 2 x 83,000 DWT |
| 2H25 |
920 |
18 containerships, 2 gas carriers, 2 bulk carriers |
4 x 1,100 TEU, 4 x 1,800 TEU, 6 x 2,900 TEU, 2 x 3,000 TEU, 2 x 4,300 TEU, 2 x 40,000m3 LPG, 2 x 83,000 DWT |
Comparative Analysis: Leading Asian Shipyards
Yangzijiang’s financial and operational metrics stand out favorably compared to regional shipyard peers.
| Company |
Ticker |
Rec |
Price (lcy) |
Target |
Mkt Cap (US\$m) |
2025F PE (x) |
2026F PE (x) |
2025F P/B (x) |
2026F P/B (x) |
2025F EV/EBITDA (x) |
2026F EV/EBITDA (x) |
2025F ROE (%) |
2025F Yield (%) |
| Seatrium |
STM SP |
BUY |
2.37 |
2.96 |
6,229 |
28.0 |
21.0 |
1.2 |
1.2 |
11.4 |
10.3 |
4.5 |
1.1 |
| YZJ Shipbuilding |
YZJSGD SP |
BUY |
3.06 |
3.45 |
9,346 |
8.1 |
7.6 |
2.0 |
1.6 |
5.4 |
4.8 |
26.8 |
3.7 |
| Marco Polo Marine |
MPM SP |
BUY |
0.07 |
0.088 |
204 |
10.5 |
9.0 |
1.3 |
1.2 |
7.0 |
5.9 |
12.9 |
2.9 |
| Hanwha Ocean Co |
042660 KS |
NR |
117,700 |
109,929 |
25,933 |
39.0 |
30.4 |
6.2 |
5.2 |
26.8 |
22.8 |
17.5 |
0.0 |
| Samsung Heavy Ind |
010140 KS |
NR |
21,050 |
23,740 |
13,320 |
30.5 |
19.0 |
4.1 |
3.3 |
19.6 |
13.6 |
14.9 |
0.1 |
| HD Korea Shipbldg |
009540 KS |
NR |
411,000 |
460,498 |
20,916 |
13.3 |
9.8 |
2.3 |
1.9 |
6.2 |
4.9 |
18.1 |
2.2 |
| China State Shipbldg Co |
600150 CH |
NR |
37.52 |
42.00 |
23,484 |
22.4 |
15.9 |
2.9 |
2.6 |
13.2 |
9.8 |
13.4 |
1.8 |
Conclusion: Yangzijiang Shipbuilding Offers a Rare Combination of Value, Growth, and Visibility
With a soaring orderbook, healthy margins, and an underleveraged balance sheet, Yangzijiang Shipbuilding stands out as a top pick in the Asian shipbuilding sector. The company’s prudent capital allocation, strong customer base, and earnings visibility into 2028 justify its premium valuation and bright outlook. Investors seeking exposure to a global leader in shipbuilding, with a proven ability to navigate sector cycles, should keep Yangzijiang firmly on their radar.
