Yangzijiang bags US$162m new containership orders

Singapore

MAINBOARD-LISTED Yangzijiang Shipbuilding has entered into an agreement with Hong Kong container shipping firm SITC International Holdings Co to build and deliver six 2,600 twenty-foot equivalent unit (TEU) containerships for US$162 million.

The six vessels will be delivered from 2022 to 2023, the Chinese shipbuilder said in a media statement on Monday.

Additionally, the new orders were placed together with four option orders for identical vessels at the same unit price, Yangzijiang noted. The option orders are to be exercised in two batches of two vessels each.

The latest announcement comes after Yangzijiang similarly inked agreements for nine vessels worth about US$226 million in November, and obtained another US$126 million in new orders back in August this year.

With the latest order win, the group has secured new orders for 49 vessels worth about US$1.42 billion so far this year, excluding the value of option orders, the group said.

Ren Letian, executive chairman and chief executive of the group, noted that Yangzijiang is happy to support SITC in strengthening their containership fleet to capture the increasing demand for "agile, flexible shipping services fulfilled by small vessels".

Mr Ren added that the recent rising demand for liquefied natural gas (LNG) in China has given the group "additional confidence in the prospects for LNG vessels".

"We are confident that we will maintain the order win momentum following the improved market sentiment," he said.

UOB Kay Hian and DBS both have a "buy" recommendation on Yangzijiang, with target prices of S$1.17 and S$1.40 respectively, while Credit Suisse has a "neutral" rating on the counter, with a S$1 target price.

Yangzijiang shares closed flat at 93.5 Singapore cents on Monday.