Yangzijiang Shipbuilding Is My Winning SG Stock

🌟🌟🌟On December 12, Yangzijiang Shipbuilding $YZJ Shipbldg SGD(BS6.SI)$  hit its All Time High at SGD 2.81.  Yangzijiang (YZJ) has been on an upward momentum this week, rising 6.4% in the past 5 days.  YZJ is now up 82% year todate and 91% in 2023.  This is simply one of the best performing Singapore stocks.

YZJ is the largest and best managed private ship builder in China with a wide economic moat to compete against its Chinese and Korean competitors.  It manufactures large and medium sized container ships, bulk carriers, oil tankers, liquid carriers and other clean energy ships. 

Why is YZJ up? 

This is due to YZJ securing  new orders for 21 vessels totalling USD 2.63 billion in less than a month which blew market expectations.  YZJ wins amounted to a huge USD 14.27 billion.  That is nearly 3 years worth of revenue, lifting its order book to USD 24 billion.

As YZJ's existing facilities are full through to 2028 and currently filling up slots for 2029, YZJ plans to expand capacity near its key Xinfu Yard.    This would add 15% to 20% to its revenue.

YZJ's Shipbuilding margins have remained robust with 3Q24 margins slightly higher than the 1H 24 margin of 25.9%.  Its management is confident that these margins are sustainable, citing stable steel prices fixed for 2025 and beyond.

By the end of 3Q24 YZJ delivered 57 vessels, achieving 90% of its target 63 vessels for the year.  Notably, the key highlight for 3Q24 was the delivery of the first 16,000 TEU LNG dual fuel containership in October.  YZJ's ability to deliver vessels on time and maintain high quality standards has been a critical factor in attracting consistent new orders, especially in the light of labour unrest at some Korean yards.

DBS and UOB KayHian are bullish on YZJ with a Buy rating, Target price of SGD 2.88 and SGD 3.60.  UOB KayHian cited YZJ's strong performance, marked by significant order wins, robust Shipbuilding margins and a promising future with the new Yangzi HongYuan yard. 

I have invested in YZJ since 2022 and am very happy with its excellent performance.  I am currently up 97% with YZJ's new all time high.    YZJ has even rewarded me with bonus shares for its spin off $YZJ Fin Hldg(YF8.SI)$  in May 2022.    The current dividend yield is 2.31% paid annually. 

Investing need not be complicated.  Just Buy and Hold quality stocks like $YZJ Shipbldg SGD(BS6.SI)$  long term and watch the magic of compounding unfold. 

Go Long Go Strong Go Yangzijiang! 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰🇸🇬🇸🇬🇸🇬

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