- RE-ITERATE BUY Entry – 1.58 Target – 1.70 Stop Loss – 1.52
- China’s largest private shipbuilder. Yangzijiang is China’s largest private shipbuilder. The company builds a broad range of commercial vessels including containerships, bulk carriers and LNG vessels. Yangzijiang has been at the forefront of shipbuilding in China.
- Spin-off of investment business. The group will spin off its investment business into a separate entity, Yangzijiang Financial Holdings (YZJFH), and will list it on the Mainboard of the Singapore Exchange. YZJFH will place a strong focus on expansion into fund and wealth management, and diversify into fast-growing sectors and new asset classes including private debt and mezzanine financing. YZJFH will set up its headquarters in Singapore, with the aim of becoming a leading investment manager in Asia.
- A record year for orderbook. In 2021, the group secured record order wins for 124 vessels with a total contract value of US$7.41 billion. The group has focused on building containerships and clean energy vessels which typically demand higher margins given their higher value-add over dry bulkers and tankers. As at the end of 2021, Yangzijiang had an orderbook of US$8.5bn for 157 vessels, with containerships accounting for >US$7bn or 83% of total existing contract value.
- Positive consensus estimates. There are 7 BUYS and 2 HOLDs, with a 12m average TP of S$1.81, or an implied 13% total return from the last close price. Yangzijiang trades at an attractive 7.8x and 6.5x FY2022F and FY2023F P/E, and offers a dividend yield of around 3.0% per annum.
Yangzijiang Shipbuilding (BS6 SP) (Source: Bloomberg)