YANGZIJIANG: Three Bullish Brokers — DBS Now Has The Highest Target Price

THE CONTEXT

• DBS Group Research's fresh report dated 15 Oct 2026 is making a stronger case for a higher valuation for Yangzijiang Shipbuilding, rather than forecasting a fresh jump in near-term profits.

DBS estimate / valuation	11 Aug	15 Oct
Target price	S$5.60	S$6.60
Target FY27 P/B	2.6 times	3.0 times
FY26 net profit	RMB10.944bn	Unchanged
FY27 net profit	RMB11.778bn	Unchanged

• DBS now models US$6.5bn of FY2026 orders, versus US$4.5bn previously.

Like other brokers, DBS also references potential orders from CMA and HMM worth USD3.9bn and puts its target price ($6.60) at the highest among three brokers. (See: YANGZIJIANG: Double Target-Price Upgrade by Brokers ($6.10, $6.00). Why?)

• Read excerpts of its report below .....

overview Aug26

Excerpts from DBS Group Research report
Analyst: Ho Pei Hwa

More Wins in the Sails

• Higher-priced contracts offer further margin upside from the record 37.1% in 1H26

YANGZIJIANG
Share price: $5.15	Target: $6.60

• Positive order momentum in 3Q should lift FY26 wins above the USD4.5bn target and new record orderbook above USD25bn, providing visibility through 2030

• Potential revival of Runze yard expansion could increase capacity (+30%) and earnings growth beyond 2029

• Reiterate BUY; TP raised to SGD6.60 on 3.0x FY27F P/BV, equivalent to 11.5x FY27F PE, supported by a longer earnings runway and 25-30% ROE; attractive dividend yield >6%

Investment Overview

Best-in-class private shipbuilder with a widening competitive moat. Yangzijiang Shipbuilding (YZJ), is China’s second-largest private shipbuilder and one of its most efficient and profitable, supported by superior execution, disciplined cost control and an estimated ≥5ppt cost advantage over Chinese and Korean peers.

Its proven capabilities in large dual-fuel containerships and gas carriers reinforce its competitive position, while the delivery and successful operation of its first LNG carrier should establish an important track record in a technically demanding segment.

Higher contract prices offer further room for margin expansion. Shipbuilding gross margin reached a record 37.1% in 1H26 as higher-priced vessels secured during the upcycle progressed through construction.

We see further upside as a larger proportion of these contracts moves into revenue recognition, supported by favourable contract pricing, yard optimisation and disciplined cost control.

The ramp-up of Hongyuan provides an additional volume lever and should lift total shipbuilding capacity by c.20% by end-2026.

Multiple capacity levers extend the growth runway beyond 2029. The USD22.4bn orderbook provides delivery visibility through 2029, while Hongyuan (+20% capacity) supports nearterm volume growth and the potential development of the Runze yard (+30% capacity) could extend growth beyond 2029.

The Hongda repair yard adds a complementary, shorter-cycle revenue stream and positions Yangzijiang to capture growing demand for vessel repairs, retrofits and decarbonisation-related upgrades.

Together, these initiatives should sustain earnings growth beyond the delivery of the existing orderbook.

Valuation

Reiterate BUY; TP raised to SGD6.60 (prev SGD5.60), based on 3x FY27F P/BV (prev 2.6x P/Bv), implying 11.5x FY27PE.

Ho Pei Hwa, analystThis is in line with peers' average, justified by its high >25% ROE and 6-7% dividend yield.

We believe 60% of the re-rating could come from earnings growth and 40% from an uplift in the valuation multiple from 9x towards 11.5x PE.

While shipbuilding orders have passed their 2024 peak, orderbook stays near record high levels, YZJ offers compelling growth + yield over the next 3 years, with earnings likely only peaking 2028 or beyond.

Revenue is denominated mainly in US dollars. Assuming the net exposure of ~50% is unhedged, every 1% depreciation in the USD could lead to a 1.3% decline in earnings.

Every 1% rise in steel cost, which accounts for about 20% of cost of goods sold (COGS), could result in a 0.7% drop in earnings.

YANGZIJIANG: Three Bullish Brokers — DBS Now Has The Highest Target Price

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