Analyst Lim Siew Khee from CGS-CIMB reiterated a Buy rating on Yangzijiang Shipbuilding (Holdings) and keeping the price target at S$3.90.
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Lim Siew Khee has given his Buy rating due to a combination of factors that highlight the company’s strong position and future potential. Yangzijiang Shipbuilding (Holdings) has secured significant contracts amounting to US$440 million for the construction of eight vessels, which include containerships and bulk carriers. This achievement brings the year-to-date order wins to US$1.9 billion, contributing to an estimated order book of approximately US$25 billion.
Despite the recent cancellation of contracts for four oil tankers due to legal concerns related to US sanctions, the company has managed to mitigate potential financial impacts, as no revenue or profit was recognized from these contracts. The analyst believes that the temporary dip in share price due to the cancellations could present a buying opportunity. The company’s strong order book and potential for margin expansion, coupled with its competitive valuation compared to peers, support the Buy rating. The target price is set at S$3.90, based on a 10x CY26F P/E, which is a significant discount to its Chinese and Korean counterparts.
Siew Khee covers the Industrials sector, focusing on stocks such as Yangzijiang Shipbuilding (Holdings), Sembcorp Industries, and ST Engineering. According to TipRanks, Siew Khee has an average return of 10.2% and a 59.09% success rate on recommended stocks.
In another report released today, DBS also reiterated a Buy rating on the stock with a S$3.80 price target.