Lim Siew Khee, an analyst from CGS International, reiterated the Buy rating on Yangzijiang Shipbuilding (Holdings). The associated price target is S$4.95.
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Lim Siew Khee has given his Buy rating due to a combination of factors including solid earnings delivery and attractive shareholder returns. Yangzijiang Shipbuilding posted a strong 30% year-on-year profit increase with margins holding at a robust 35%, while an unexpected step-up to a 50% dividend payout supports an appealing forward yield, assuming this payout is maintained.
The rating also reflects visibility of future growth underpinned by a sizeable orderbook and ambitious new order targets. Pending contract finalisations, long-dated containership demand, and added capacity from the Hongyuan yard expansion provide multi-year revenue support, while the stock still trades on undemanding forward valuation multiples versus global peers, leaving room for re-rating if order wins or currency trends surprise positively.
In another report released today, DBS also maintained a Buy rating on the stock with a S$4.55 price target.