Yangzijiang Shipbuilding rose more than 14%: Analysis of its investment value and development potential
2024-08-13 10:58uSMART

On August 13, the share price of Yangzijiang Shipbuilding soared all the way. As of 10:00 on the same day, the share price had once exceeded 13%, and now reported 2.73. At present, the total market value of Yangzijiang Shipbuilding has reached 10.746 billion, and the price-earnings ratio is 14.09. The stock is currently performing well and is favored by investors.

Source: uSMART SG

 

What company is Yangzijiang Shipbuilding?

Since its establishment in 1956, Yangzijiang Shipbuilding Group has become one of the largest private listed shipyards in China with its outstanding shipbuilding technology and innovation capabilities. After listing on the main board of the Singapore Exchange in 2007, the group expanded rapidly and formed a comprehensive maritime group with shipbuilding as the core, covering shipbreaking and marine engineering. The group has three shipyards in Jiangsu Province, China, with a total construction capacity of 2 million CGT and a production area of ​​nearly 400 hectares. It also has a wholly-owned shipbreaking yard and marine engineering base. With its integrated design concept, Yangzijiang Shipbuilding promotes precision and digital shipbuilding. Its main products include container ships below 10,000TEU and bulk carriers below 100,000DWT, and it continues to enter the large ship market. The group's quality management system has passed ISO9001:2000 certification, its product quality has been internationally recognized, and its economic benefits are among the best among Chinese shipbuilding companies.

 

Yangzijiang Shipbuilding's financial report is gratifying, and the order volume has set a record

On Monday evening, August 12, Yangzijiang Shipbuilding Group released its financial report for the first half of the year. The report showed that as of the end of June, the group's net profit in the first half of the year increased by 77.2% year-on-year to RMB 3.0584 billion (approximately S$571 million). This significant growth was mainly due to a 65.1% year-on-year increase in gross profit to RMB 3.4841 billion, and a 15.3% year-on-year increase in revenue to RMB 13.0486 billion.

At the performance conference on August 12, Yangzijiang Shipbuilding further pointed out that the gross profit margin in the first half of the year increased by 8.1 percentage points year-on-year to 26.7%. This increase was mainly attributed to two factors: first, the depreciation of the RMB against the US dollar increased the revenue denominated in US dollars after conversion into RMB; second, the group signed more favorable priced contracts, thereby increasing revenue.

Despite the strong performance, Yangzijiang Shipbuilding did not declare an interim dividend. In this regard, the group's CEO Ren Letian said that the company will not be satisfied with its current achievements. He emphasized that Yangzijiang Shipbuilding will continue to expand its production capacity to meet the strong demand in the clean energy ship market. In addition, the group is also exploring diversification of revenue sources by operating liquefied natural gas terminals. This strategic move will provide the group with a stable and defensive income stream in the long term.

CEO Ren Letian's remarks indicate that Yangzijiang Shipbuilding is taking active actions to ensure its leading position in the shipping industry and maintain its market leadership. By continuously optimizing its product portfolio and expanding new business areas, Yangzijiang Shipbuilding is moving steadily towards sustainable development.

 

The shipbuilding industry has entered an upward cycle, and the industry has considerable development potential

The shipbuilding industry is not only a key industry for the national economy and national defense security, but also plays a vital role in the global economy. Civilian ships, especially bulk carriers, cruise ships and container ships, have become the dominant force in the market due to their wide range of commercial uses. In 2023, the completion and delivery volume of these ship types and the global capacity share both show their core position in global trade.

Although the shipbuilding industry is affected by cyclical fluctuations, the industry has begun to enter a new upward cycle since 2021, and has now reached a stage of rapid development. This is due to the combined effect of several key factors: during the epidemic, economic stimulus policies in countries such as the United States boosted consumer demand, leading to a rapid increase in demand for container cargo shipping; secondly, geopolitical conflicts and military tensions have impacted the global supply chain and affected the smooth flow of shipping routes; finally, with the global requirements for carbon neutrality and environmental protection in the shipping industry, the demand for new environmentally friendly ships is also rising.

These factors have jointly promoted the increase in new ship orders, indicating that the shipbuilding industry will usher in a long-term boom cycle. Against the backdrop of supply bottlenecks, ship prices are expected to continue to rise, bringing higher profit margins to shipbuilding companies. With the concentrated delivery of these high-priced, high-quality new ship orders, shipbuilding companies and related supporting companies in the industry chain will gradually see a significant release of performance.

For investors and industry observers, now is the best time to pay attention to companies in the shipbuilding and offshore industry chain. With the recovery of the global economy and the growth of international trade, the development potential of the shipbuilding industry will be further released, bringing new growth opportunities to related companies.

 

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