$YZJ Shipbldg SGD(BS6.SI)$  $6 Target Price.  

*Yangzijiang Shipbuilding (BS6) — YZJ is China's largest private shipbuilder. 1H26 was record: revenue RMB17.5B +36.2% YoY, PATMI RMB5.4B +28.4% YoY, shipbuilding margin *37.1%*.

--Growth Catalysts for YZJ Shipbuilding--

*1. Massive Order Book = 4-5 Years Visibility*

- *US$22.4B order book, 256 vessels*, deliveries through 2030.

- Mix: 151 containerships (US$16.06B), 41 oil tankers, 37 bulk carriers, 27 gas carriers.

- *69-71% green / dual-fuel tonnage* — aligns with decarbonization demand.

*2. Order Recovery After 2025 Trough*

- FY2025 was a trough: only US$2.5B new orders (vs US$14.6B in FY2024).

- 1H26: *US$1.75B won* (38 vessels: 25 container, 10 tankers, 2 gas, 1 bulk) vs FY2026 target US$4.5B.

- *Pipeline for 2H26:* Channel checks point to *US$3-4B in advanced talks*, including potential CMA CGM 12 x 24,000 TEU containerships (~US$3.0B) and HMM 8 x Newcastlemax bulk carriers (~US$0.9B). Could be announced at 3Q26 update in mid-Nov 2026.

*3. Margin Expansion — Structural, Not Cyclical*

- Shipbuilding gross margin up 1.9pp YoY to 37.1%, beating Korean and Chinese peers.

- Drivers: High ASP orders won at 2024 peak pricing now being recognized (+17% ASP YoY), stable steel prices (RMB4,000-5,000/t), early-secured low-cost equipment, and focus on high-margin containerships/tankers over dry bulk.

- Management guides margins to stay ∼31%+ in 2026-27.

*4. LNG Carrier — Next Growth Leg*

- *China's first private yard to build and deliver large LNG carriers.* Completed 2 x 175k CBM LNGCs by June 2026.

- LNGC is higher barrier to entry, higher margin. Seen as medium-term growth driver as global LNG trade expands.

- Also building ethane carriers, LPG / VLAC / VLEC.

*5. Hongyuan New Yard — Capacity Expansion*

- New Hongyuan shipyard completing end-2026. Already contributed RMB0.5B from early block construction in 1H26.

- Will add capacity for large vessels and support margin after integration.

*6. Seaspan / Poseidon Strategic Stake*

- Acquired *10% stake in Poseidon (Seaspan parent) for US$825.7M*.

- Seaspan is a major containership lessor. Gives vertical integration, order visibility, and stability vs pure shipbuilding cycle. Expected to add ∼5% to pro-forma net profit.

*7. Shareholder Returns — Payout Raised to 50%*

- FY2025 DPS SGD0.20, +66.7% YoY.

- Payout ratio raised from 38% to *50%*, guided as sustainable for FY2026-27.

- Forecast yield: 5.0% FY26, 5.1% FY27, 5.7% FY28.

- Net cash CNY12.5B (~SGD0.60/share, 12% of price, 33-36% of equity).

*Bottom line:* YZJ's catalysts are 1) Order win recovery in 2H26, 2) LNG carrier penetration, 3) Margin defense at 30%+, and 4) Higher dividend. OCBC just initiated BUY with S$6.10 target.