Yangzijiang Faces Investor Jitters Over US Port Fees, But Analysts Remain Bullish
Singapore-listed Yangzijiang Shipbuilding (Holdings) saw its share price plunge nearly 30% from a peak of $3.30 on Feb 20 to $2.38 on Feb 28, following concerns over a US proposal to impose up to US$1.5 million in port fees on Chinese-built vessels entering the country.
Despite the market panic, analysts from DBS, UOB Kay Hian, Citi Research, and CGS International have maintained buy ratings, arguing that the sell-off is overblown and that Yangzijiang’s long-term fundamentals remain strong.
US Tariffs Not a “Doomsday” Scenario
The proposed US fees have sparked fears that Chinese shipbuilders could lose a significant share of new vessel orders. However, analysts note that:
Shipping companies are likely to pass on higher port fees to consumers via surcharges.
Chinese shipyards account for nearly half of global shipbuilding capacity, making it impractical for shipping lines to avoid them entirely.
Korean yards are already at full capacity, while US shipyards are far more expensive—costing two to three times more than Asian yards.
Citi Research analyst Luis Hilado downplayed the risks, stating that the proposal is “not debilitating” and that the sell-off overstates the potential impact. According to Yangzijiang’s management, the expected cost increase per container is just US$100, which is unlikely to significantly affect long-term demand.
Analysts Adjust Targets, But Maintain Buy Ratings
DBS Group Research: Target Price $3.80
Ho Pei Hwa from DBS describes the sell-off as excessive, maintaining her buy call with a target price of $3.80. She notes that:
Yangzijiang suffered a larger drop in share price than other shipping firms and Chinese shipyards.
Any new orders placed today would only be delivered from 2028 onwards, beyond Trump’s current term—making policy changes less of a near-term concern.
Citi Research: Target Price Trimmed to $3.24
Citi’s Luis Hilado has lowered his FY2025 and FY2026 earnings forecasts by 4% and 15%, respectively, due to lower-value contracts in the short term.
FY2025 revenue projection reduced from RMB34.2 billion ($6.35 billion) to RMB27.7 billion, still a 4% YoY growth.
Target price trimmed to $3.24 from $3.40, based on a 10x earnings multiple.
Despite the cut, Hilado remains bullish, citing Yangzijiang’s record US$14.6 billion in new orders in FY2024, bringing its total order book to US$24.36 billion, ensuring revenue visibility up to 2030.
UOB Kay Hian: Target Price Adjusted to $3.50
UOB Kay Hian’s Adrian Loh also sees no fundamental risks to Yangzijiang’s long-term business. While trimming his FY2025 earnings estimate by 1% due to tax rate adjustments, he raised his FY2026 projection by 7%, citing new project contributions.
Maintains buy call, revising target price to $3.50 from $3.60.
Believes earnings visibility into 2028 justifies a premium valuation.
Potential share buyback program could provide additional upside for investors.
CGS International: Target Price $3.62
Lim Siew Khee and Meghana Kande from CGS International argue that Yangzijiang’s shares were oversold, maintaining an “add” rating with a target price of $3.62.
No order cancellations or delays have been reported due to the US port fee proposal.
Existing orders have filled yard capacity until 2027, reducing short-term uncertainty.
Their valuation is based on 12x FY2026 earnings, in line with Korean and Japanese shipyards.
Growth Plans and Revenue Outlook
Yangzijiang is not standing still amid market uncertainties.
Investing RMB3 billion to expand yard space for larger orders.
Spending RMB2 billion on an LNG terminal, diversifying revenue streams.
Targeting US$6 billion in new orders for FY2025, exceeding the earlier US$4.5 billion estimate.
Bottom Line: A Buying Opportunity Amid Unwarranted Fear?
While US tariff concerns have rattled investors, analysts universally agree that Yangzijiang’s fundamentals remain strong. With:
✔ Record-high order backlog ensuring stable revenue until 2030
✔ Massive global shipbuilding demand limiting alternatives to Chinese yards
✔ Potential for further capital returns through share buybacks
The recent share price dip presents an attractive entry point, making Yangzijiang a compelling long-term investment, say analysts.
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