🌟🌟🌟Singapore celebrated SG60 this year, marking 6 decades of independence, ingenuity and identity. I am launching a personal tribute to this milestone with a series of articles spotlighting the most compelling companies listed on the SGX.
If you are inspired to take part in this journey, there is no better time. Tiger Brokers $Tiger Brokers(TIGR)$ is celebrating SG60 with a special promotion - from now until October 17, enjoy zero commission, zero custodian fees and stand a chance to win attractive prizes as you invest in Singapore's future. It is a timely opportunity to align your portfolio with the spirit of Singapore.
Featuring Yangzijiang Shipbuilding (SGX: BS6)
🌟🌟🌟Yangzijiang Shipbuilding (YZJ) $YZJ Shipbldg SGD(BS6.SI)$
Performance wise, YZJ is up 8% in just 1 month and 12% year todate. In 2024 YZJ has jumped 33%.
Why is YZJ Roaring?
USD 920 million in fresh orders for 22 vessels have just landed, bringing 2025's total orders to nearly USD 1.5 billion. In a world of trade uncertainty, YZJ is still getting calls to build ships. That is trust in YZJ's excellent shipbuilding work.
YZJ's Margins are expanding : This is a rare feat in a sector bracing for tariffs. YZJ's Shipbuilding gross margins surged to 35.2%, up 5.5% from 2H24. This is YZJ's highest margin in years driven by :
Low steel costs
Strong execution of high value contracts
Tanker margins are now rivalling containers hips.
Eco-Leadership: 74% of its order books are for echo-friendly vessels. This isn't just compliance. It is foresight.
Shipyard capacity filled till 2027 with ambitions to win USD 6 billion in orders for FY26. That is confidence.
Dividends pay out doubled from 6.5 cents to 12 Singapore cents per share. The current dividend yield is 3.6%.
Is YZJ a Buy?
According to DBS analyst Ho Pei Hwa, YZJ is a Buy with a Target Price of SGD 3.80. The analyst said that the impact from the termination of USD 180 million is immaterial at this point.
YZJ has just clinched USD 440 million new orders including 2 large containerships from its long standing customer Seaspan, restoring confidence on YZJ's order win outlook.
DBS also said that YZJ remains undervalued relative to its regional peers and expect earnings growth and contract wins to drive share price close to its target price of SGD 3.80.
Why I Invest in YZJ
I have invested in YZJ since 2022 and in that time, it has rewarded me with great dividends and capital growth. I was also given free shares of its offshoot $YZJ Fin Hldg(YF8.SI)$
YZJ isn't just building ships. It is building trust. In a world of geopolitical tension and volatility, YZJ is delivering precision, profitability and integrity. This is a company that does not chase headlines. It earns them. YZJ is the largest privately owned shipbuilder in China and one of the most efficient and profitable shipbuilders in the industry.
Concluding Thoughts
YZJ shows integrity when it took the bold step to cancel its USD 180 million order with its buyer because the buyer was trying to circumvent US sanction laws and regulations. I applaud its tough decision and with this, YZJ has earned a good reputation in the shipbuilding industry.
As the late Great Charlie Munger likes to say "The Big Money is not in the Buying and Selling but in the Waiting."
As we toast 60 years of Singapore's independence, I salute $YZJ Shipbldg SGD(BS6.SI)$
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