Yangzijiang Shipbuilding - GTT Accreditation A Tipping Point; All Set For LNG Carrier Orders

Yangzijiang Shipbuilding - DBS Research 2022-09-09: GTT Accreditation A Tipping Point; All Set For LNG Carrier Orders

SGinvestors.io

Published: 2022-09-16 11:48 AM

YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)

Yangzijiang Shipbuilding (SGX:BS6) has obtained the GTT license for the construction of vessels using industry benchmark GTT Mark III membrane technology. This showcases Yangzijiang’s technical capability to build large LNG carriers. The space is currently dominated by Korean shipbuilders, who have 80-90% of market share.
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There are 3 main alternative technologies:
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2. SPB technology, developed by a Japanese engineering and shipbuilding group, and
3. KC-1 technology, developed by Kogas in South Korea.

Including Yangzijiang, there are 29 GTT licensed shipyards globally, for both commercial vessels and offshore platforms. In China, there are 8 GTT licensed yards. Of this, Hudong Zhonghua is the most prominent Chinese LNG carrier builder with 30 units or ~11% market share, while the Jiangnan Shipyard and Dalian shipyards have five and two units of large LNG carriers in its orderbooks, respectively.
Yangzijiang would be the first non-SOE Chinese shipyard to be added to the GTT licensed yard list. Based on Clarksons, the latest LNG carrier orders are slated for delivery in 2026.
We believe Yangzijiang is well positioned to secure its maiden LNG carrier order with this GTT accreditation and their earlier delivery slots in 2025. LNG carrier is one of the highest value commercial vessels with highest barrier to entry. A 170- 180cbm LNG carrier newbuild unit would cost ~US$250m. This will not only be the next growth driver for Yangzijiang but also a critical development in its clean vessel transformation, riding on robust demand for LNG carriers and trend towards cleaner LNG dual-fuel vessels.