- We initiate coverage on Yangzijiang Shipbuilding (SGX:BS6) with a non-consensus HOLD and DCF-based Yangzijiang's target price of S$4.15, as we believe both the shipbuilding cycle and margins are past their peak.
Newbuild cycle and margins past peak
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
Near-term clarity but newbuild cycle is past its peak
- Containership orderbooks have reached ~32% of fleet, the highest since 2010, with fleet growth outpacing end-market demand. Global ship orders peaked in 2024 and fell 27% in 2025, with Clarksons forecasting a further 12% decline in 2026. This is already visible in Yangzijiang’s order intake, which dropped to a 5-year low of US$2.5b in 2025.
- Meanwhile, rising competition from Hengli and smaller Chinese yards has pushed newbuild prices down 5–10%, with a similar decline expected in 2026.
- A potential Suez reopening and IMO climate framework deferment could further dampen ordering demand. We therefore forecast only US$4.0–4.5b of new orders, versus US$8.4b on average in 2021–24.
Peak margins, limited dividend upside
- Read more at SGinvestors.io.
