Yangzijiang Shipbuilding Shares Hit Record High After Profit Swells

By Amanda Lee

Yangzijiang Shipbuilding's shares rose to a new high after the Singapore-listed shipbuilder posted a steep rise in profit on the back of growing orders.

Shares rose as much as 15% to 2.74 Singapore dollars (US$2.07) early Tuesday, bringing year-to-date gains to over 80%.

Yangzijiang Shipbuilding said late Monday that it posted first-half profit equivalent to more than US$426 million, up 77% on year, while revenue rose 15% on higher shipbuilding activity and better shipping charter rates. The company added orders worth US$8.5 billion, bringing its orderbook to a new high of US$20.2 billion for 224 vessels, which it say gave it earnings visibility up to mid-2028.

Citi Research analyst Luis Hilado said the order wins through six months exceeded his full-year forecasts, although he cautioned that the company could face short-to-medium term cost pressure from plans for yard expansion and other capital expenditure he thinks likely related to fleet renewals and upgrades to clean energy.

"Revenue momentum appears strong, but we await indications of balancing out expansion-related costs and the timing of such," he wrote in a research note. Citi has a buy rating and a S$2.45 target price on the stock.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

August 12, 2024 23:52 ET (03:52 GMT)

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