Yangzijiang Shipbuilding - CGS-CIMB Research 2022-07-08: Riding The LNG Momentum

Yangzijiang Shipbuilding - Riding The LNG Momentum

  • Yangzijiang Shipbuilding (SGX:BS6) has won orders for 4 units of 8,000 TEU liquefied natural gas (LNG) dual-fuel containerships from Pacific International Lines (PIL). These orders will be progressively delivered in Jan, Mar, Apr, and Jun 2025.
  • Including the orders for Pacific International Lines, Yangzijiang Shipbuilding has secured year-to-date order wins for 16 vessels as of 6 Jul 22. We are positively surprised by the year-to-date total orders of US$990m given its capacity constraints till 2024. However, deliveries are scheduled till 2025, building earnings visibility beyond FY24.
  • We deem year-to-date US$990m of order wins as healthy compared to their average order wins of US$1.4bn per year in FY09-FY20. We estimate that these 4 units of 8,000 TEU LNG dual-fuel containerships secured from Pacific International Lines are worth US$100mil per vessel.
  • We think Yangzijiang Shipbuilding’s order wins for the LNG and LEG vessels will allow it to catch up to its Korean peers in terms of valuation. We base our target price on 10x CY23F P/E (2-year historical average).
  • Yangzijiang's share price is currently trading at 5.7x CY23F P/E. Reiterate ADD and target price of S$1.63. We see positive share price movement from this news.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

LIM Siew Khee CGS-CIMB Research | Izabella TAN CGS-CIMB Research | https://www.cgs-cimb.com 2022-07-07
SGX Stock Analyst Report ADD MAINTAIN ADD 1.630 SAME 1.630

Previous report by CGS-CIMB:
2022-05-04 Yangzijiang Shipbuilding - Carved Out Basis, Cash Rich, Yield Play

Target prices by 2 other brokers at Yangzijiang Target Prices.
Listing of broker reports at Yangzijiang Analyst Report.

Relevant links:
Yangzijiang Share Price History,
Yangzijiang Announcements,
Yangzijiang Dividends & Corp Actions,
Yangzijiang News Articles


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