Yangzijiang Shipbuilding has defied China’s ‘zero-Covid’ strategy to maintain its newbuilding delivery schedule, the latest analysis shows.
China’s largest privately owned shipbuilder delivered a total of 18 vessels in the second quarter of 2022, according to Singapore investment house UOB Kay Hian.
“In our view, these deliveries are even more impressive in light of the challenges that it and its suppliers have faced due to China’s dynamic zero-Covid strategy with disruptions and delays to the domestic and international supply chains as well as labour issues,” said analyst Adrian Loh.
“Importantly, we note that three of its second quarter deliveries were for the larger class of containerships, i.e., larger than 10,000 teu, which we believe should generate higher shipbuilding margins in 2022.
“Yangzijiang had previously disclosed that it has a target of delivering 60 vessels in 2022 — given that 34 of these vessels have been delivered thus far, the company could potentially exceed this and achieve its stretch target of 70 vessels,” he added.
Deliveries between April and June included two 12,800 teu and one 11,800-teu container ships for Seaspan, six feeder ships between 1,800 teu and 2,400 teu, a pair of 13,000-dwt chemical tankers, one 59,000-dwt bulker and one 31,800-dwt bulker and a 25,000-dwt LNG tank carrier.
The Singapore-listed shipbuilder also disclosed that its Changbo yard, restarted at the beginning of the first half of 2021, is now working at full capacity.
“Being a smaller yard, it has been deployed towards the construction of smaller-sized vessels. In the past 12 months, the yard has completed and delivered two 1,800-teu containerships with a third one tentatively scheduled for delivery at the end of July,” said Loh.
Elsewhere, Yangzijiang’s fleet of 26 vessels generated a solid 40% gross margin in 2021 on the back of a 32% year-on-year increase in revenue, according to Loh.
“Management expects this segment to continue to perform strongly in the first half of 2022 and highlighted that with an average age of eight years, it is a young fleet,” he added.
Looking ahead, Loh said Yangzijiang may be in line to win new orders for LNG or dual-fuelled neo-panamax containerships, ultramax bulkers and possibly LNG carriers.
TradeWinds recently reported that the yard was poised to ink a deal for four LNG dual-fuel 8,000-teu container ship newbuildings worth about $480m from Singapore’s Pacific International Lines.
Meanwhile, Norwegian shipowner Ocean Yield recently confirmed that it had ordered two dual-fuel 36,000-cbm liquefied ethylene gas newbuildings will be built at Yangzijiang joint-venture shipyard Jiangsu Yangzi-Mitsui Shipbuilding (Yamic) for delivery in 2024 and 2025.
Last month it emerged that US-listed asset manager T Rowe Price is a significant shareholder in Yangzijiang with an 8.6% stake.