To The Moon

🌟🌟🌟Despite the doldrums in the Singapore markets, Yangzijiang Shipbuilding $YZJ Shipbldg SGD(BS6.SI)$  ended the year on December 31, hitting an all time high of SGD 2.99.   Yangzijiang (YZJ) has been on a tear in 2024.  It is  on a strong uptrend, rising 3.4% in the past 5 days and is up 23% in just 1 month.   YZJ has skyrocketed to 94% in 2024 and a massive 360% in the past 5 years.  This is an excellent return especially for Singapore Stocks.

What is the success story of YZJ?

YZJ is one of the largest, most efficient and profitable shipbuilders in China.    It has moved up the value chain to produce ultra large container ships and very large bulk carriers as well as LNG vessels.

YZJ has been winning big orders in 2024.  The most recent orders announced on December 3 were for 21 vessels totalling USD 2.63 billion.  This was achieved in less than a month.  Yeartodate wins amounted to a whopping USD 14.27 billion.  That is nearly 3 years worth of revenue, lifting its order book to USD 24 billion.

In 3Q24, YZJ secured USD 3.16 billion in new orders with its Shipbuilding margins remaining above 26% year todate.  This continued spate of order wins has resulted in YZJ order book hitting a historical high of USD 22.14 billion as at 3Q24.  More importantly this gives YZJ revenue visibility well into 2029.

For 2025 YZJ 's management stated that it will guide for higher new order wins, given that it will have its new Yangzi Hongyuan yard ready for operations in 1H26.  Analysts' estimate the 2025 new order wins could range at USD 6 billion to USD 7 billion with the new capacity.

YZJ management said that its 3Q24 Shipbuilding margins were a little higher than 1H24's margin of 25.9%.  YZJ also said that its current margin levels are sustainable, pointing to its steel prices which it has fixed for 2025 and should remain stable well into 2026.

As at end 3Q24, YZJ delivered 57 vessels and has completed 90% of its target of 63 vessels in 2024.

The key highlight for 3Q24 was the delivery of its first 16,000TEU LNG dual fuel containership in October.  One of the key reasons for YZJ 's success is its ability to deliver its vessels on time.   In contrast its Korean competitors were unable to deliver vessels in a timely manner due to labour unrest and that has led to loss of market share globally.

Both DBS and UOB Kay Hian analysts are bullish on YZJ with a Buy rating, Target price of SGD 3.60, an upside potential of 20%.

I have invested in YZJ since 2022 and I am very happy with its sterling performance in 2024.  Considering when YZJ was only SGD 1.49 per share, a 52 week low in 2024, it is simply amazing how its share price doubled in recent months due its high octane performance in winning massive orders to take it well into 2028.

My strategy to  Buy and Hold YZJ with a long term horizon is certainly paying off as it is full steam ahead for this excellent company.  

As the late Charlie Munger likes to say "The first rule of compounding is to never interrupt it unnecessarily".  

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