- Yangzijiang Shipbuilding (SGX:BS6)'s management is confident of securing US$4.5bn new orders in FY26, mainly from healthy demand for small-mid-sized containerships, despite newbuild prices softening 5-10% from 2024 peaks amid peer capacity expansion, intensifying competition.
Earnings growth on track.
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- There could be further boost to earnings from reselling terminated vessels (potentially US$660mil total vessel value translating to ~US$132mil or RMB920 profit assuming 20% gains). LNG terminal and Robinson office building could start to contribute from 2027 which are yet in our forecasts.
Attractive dividend yield.
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- Management expresses “strong willingness” in maintaining the upper end (50%) so long as earnings stay strong and capital needs remain manageable, signalling ongoing commitment to shareholder returns. Reiterate BUY, target price lifted to S$4.55 as we roll over valuation to FY26 at 2.6x P/BV, in line with 15% discount to global peers.
Key takeaways from briefing and post results group meeting:
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