YZJ Shares (BS6) – Set To Report H1 Earnings

Yangzijiang Shipbuilding Holdings (SGX: BS6), also known as YZJ, has experienced a remarkable performance in the stock market this year. Notably, the Chinese shipbuilder's share price has more than 50% year-to-date, reaching an all-time high of S$2.75.

With H1 earnings expected, we take a quick look over previous numbers.

In conjunction with its stock price ascent, YZJ has reported impressive financial results for 2023, demonstrating its operational prowess and market appeal. The company's revenue increased by 16.5% year-on-year. More striking is the growth in gross profit, which surged by 69.2%, whilst net profit also gained to the tune of 57%. The firm's profitability reflects its strategic efficiencies and market positioning amid the dynamic landscape of global shipping.

Following these solid financial outcomes, YZJ declared and paid out a generous final dividend of S$0.065, marking a 30% increase from the previous year’s dividend of S$0.05 in 2022. This dividend payout is illustrative of the company's commitment to shareholder returns and its confidence in sustained financial health.

Adding to the auspicious financial metrics, the company's order book has witnessed substantial growth. In 2023, YZJ achieved an order win of US$7.05 billion, more than doubling its target of US$3 billion. As of the first quarter of 2024, the order book stands at a record-breaking US$16.08 billion. This considerable backlog reflects both the company's capacity to secure new work and the robust demand within the shipbuilding sector.

YZJ's proactive approach to securing contracts, particularly for vessels like liquefied natural gas (LNG) carriers and methanol dual-fuel containerships, underscores its alignment with the industry’s shift toward green shipping. Such strategic foresight into emerging shipping trends caters to the growing consciousness around environmental sustainability within maritime transport.

The company's management remains optimistic, forecasting healthy demand for oil tankers, gas carriers, LNG carriers, crude oil tankers, and LPG carriers. This anticipated demand bodes well for YZJ’s potential continued growth trajectory and provides a positive outlook for incoming projects.

While the future appears promising for YZJ, like all entities within the shipping sphere, they face the inherent cyclical nature of the industry. Potential risks that could affect YZJ include the oversupply of ships as new vessels are delivered, economic or geopolitical events that may impact demand negatively, and possible declines in ship values.