Yangzijiang’s evolution

A crusade to expand Yangzijiang Shipbuilding’s product line has ignited questions about the future of divisions that don’t support its core business.

The topic took centre stage this week during a presentation that followed the release of the Singapore-quoted company’s second-quarter earnings report.

Yangzijiang pledged to “redirect”  resources towards research-and-development and acknowledged that the future of its shipping, logistics and chartering unit isn’t certain.

The group, which oversees a fleet of ten 92,500-dwt bulkers and six 64,000-dwt newbuildings, indicated that it is still willing to place additional orders on its own behalf during market lulls but didn’t rule out the possibility of ending its tour as an owner under certain circumstances.

“Exiting of this business may be considered on strong recovery signs of the shipbuilding sector,” the company said after pointing out that, in the meantime, management is committed to building “an experienced shipping team” to oversee its logistics and chartering division.

At last check Yangzijiang boasted $5bn worth of contracts to construct 122 vessels. According to a recent regulatory filing the total includes 25 containerships and 97 bulkers. Of these, 17 are 10,000-teu boxships and 72 involve bulkers with carrying capacities of 64 to 82,000-dwt.

Earlier in the day an equity analyst at Maybank Kim Eng of Malaysia upgraded the company’s Singapore-quoted stock based on a bet that it boasts “brighter order prospects” than its peers.

The investment bank’s shipping forecaster pointed out that Yangzijiang has enough orders to keep quite busy through 2016 but intends to pursue contracts with clients that are keen on constructing 14,000-dwt containerships, LPG carriers and other types of sophisticated tonnage.

As we reported a growing number of Chinese shipbuilders that specialise in the construction of crude tankers and bulkers are planning to break into new sectors. Market sources tell TradeWinds that South Korean yards find the trend troubling.