‘No better time than now’: Yangzijiang Maritime eyes 2027-2028 profit surge on newbuild deliveries

[SINGAPORE] Mainboard-listed Yangzijiang Maritime expects earnings to pick up significantly over the next two years as more vessels are delivered, with the shipping upcycle potentially extending into the next decade, said executive chairman and CEO Ren Yuanlin. 

Despite geopolitical uncertainty and the phenomenon of “involution” in the Chinese market – characterised by fierce competition that erodes business profitability, Ren views the maritime sector as a bright spot.

“There’s no better time than now,” he told The Business Times in an interview conducted in Mandarin.

“My personal, conservative view is that the peak (of this upcycle) will be in 2030,” Ren said. “A neutral estimate is 2032, and an optimistic view is that it’s a 10-year cycle stretching to 2036.”

His outlook comes as the company prepares for a wave of vessel deliveries over the next four years.

As at Nov 2, the company’s newbuilding portfolio stood at 111 vessels, consisting of seven delivered newbuilds,18 optional newbuilds and 86 under construction.

The firm expects roughly 35 per cent of its vessels under construction to be delivered in 2027 and 2028, with another 55 per cent scheduled for 2029 and 2030.

Shipbuilding is part of the company’s core maritime business, which accounted for the bulk of its revenue in FY2025.

Yangzijiang Maritime is also involved in shipping, ship financing and ship brokering.

Through joint ventures and leasing models, the company invests in vessels for charter and sale, while also offering financing solutions such as sale-and-leasebacks, pre-delivery loans, and secured loans.

The firm is one of three listed entities under the Yangzijiang ecosystem backed by Ren. 

Yangzijiang Maritime was spun off in November 2025 from Yangzijiang Financial’s maritime investment segment.

Key growth drivers

Looking ahead, chief financial officer Sun Jianping noted that the company’s ship financing business generates “very stable” interest income. 

While lower interest rates might draw some lenders back to the maritime sector, Sun said that regulatory shifts are having a “more structural impact”.

For example, the rollout of Basel IV banking rules in the European Union has raised capital requirements for asset-backed lending. This has made traditional ship lending less attractive for many European banks, prompting them to widen margins on shipping loans to meet their minimum return thresholds.

The higher cost of maritime financing and a more selective lending environment present an opportunity for Yangzijiang Maritime, particularly in serving growing shipowners, said Sun. 

Meanwhile, he sees room for “explosive” growth in the shipbuilding segment, which generates newbuild margins. 

Environmental regulations are a major catalyst. Over the next 10 to 15 years, Ren estimates roughly 40,000 to 48,000 old vessels will need to be retrofitted or replaced to meet stricter carbon emission requirements in regions like Europe. 

To capitalise on this shift, the company intends to grow its ship conversion and retrofitting business, said Sun.

While alternative-fuel-capable vessels currently account for a small proportion of the company’s overall investments, Ren said he expects this to increase over time, declining to provide specific targets. 

Valuation challenges

Despite the long-term upside potential, the company’s bottom line has recently faced headwinds.

On Aug 11, Yangzijiang Maritime posted a 29 per cent drop in net profit to US$44.9 million for the first half ended Jun 30, 2026, from US$63.5 million in the year-ago period.

This came despite a 49 per cent year-on-year increase in total income to US$81.6 million, from US$54.6 million, supported by stronger contributions from its maritime fund assets.

The company said earnings were dragged down by higher operating expenses as it expanded its maritime investment portfolio, as well as foreign exchange losses.

Following the results, PhillipCapital research manager Glenn Thum downgraded the counter to “accumulate” from “buy” and trimmed his target price to S$0.68 from S$0.69.

However, Thum noted in a report on Aug 19 that the company’s cost advantage – building vessels at 15 to 20 per cent below market rates – locks in margins early and insulates profits against weaker resale prices.

DBS analyst Ho Pei Hwa maintained her “buy” call on the counter with a target price of S$0.88 in a report on Aug 13.

She expects earnings to grow by more than 20 per cent from 2027 onwards, driven by “accelerating capital deployment into higher-yielding maritime investments and newbuild projects, predominantly tankers and bulk carriers”.

While she flagged “slower-than-expected capital deployment affecting yields” as a key risk, she noted that the company’s fully integrated maritime investment “significantly mitigates such volatility”.

Other potential business threats include counterparty risks in finance leases, and execution hurdles on newbuild projects such as cost overruns or delivery delays, said Ho.

Addressing the stock’s valuation, Ren acknowledged the liquidity constraints of the local bourse. 

“If Yangzijiang Maritime was listed in China instead of Singapore, I estimate its market capitalisation would be more than five times higher,” he said.

However, the CEO said the Yangzijiang ecosystem remains committed to the Singapore Exchange.

“We do not regret listing in Singapore because we know the local market has given us tremendous support, and we will maintain our foundation here,” he said.

Shares of Yangzijiang Maritime closed 0.9 per cent or S$0.005 lower at S$0.575 on Friday (Nov 13).