Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) is investing around 4 billion yuan ($756.9million) to double its annual shipyard capacity by 2013, from 3.5 million deadweight tonnes currently, chairman Ren Yuan Lin said, Reuters reports.Analysts have been concerned about the potential oversupply in the sector, which is pushing down prices of newbuilds, but Ren said Yangzijiang can still secure orders because of its new product types, support from Chinese banks and strong cash balance.
The company is developing its Xinfu yard in China’s Taixing city, which is expected to have an annual capacity of 3 million DWT when fully operational, as well as the land and wharf at its New Yangzi yard in Jingjiang city.
“Inclusive of land and wharf at the New Yangzi yard and the Xinfu yard, our capacity will be able to double by 2013,” Ren told Reuters in an interview. He added that the expansion will be funded through the firm’s cash and bank loans.
“We are still able to secure orders amidst the current market outlook because of the support of Chinese banks as well as our new product types -- the 4,800 and 10,000 TEUs — which are widely accepted in the market,” Ren said.
Yangzijiang reported a 20% year-on-year increase in its second-quarter net profit to 963.9 million yuan. Net profit margin stood at 30.5%, compared with 26% a year earlier. As at June 30, the firm had cash and cash equivalents of 2.8 billion yuan.
In its second quarter, it secured US$700 million ($850.2 million) contracts from Seaspan Corp (SSW.N) to build seven 10,000 twenty-foot equivalent unit (TEU) container ships, with options for 18 more valued at US$1.8 billion.
Yangzijiang’s order book stood at 126 vessels with a total value of US$5.5 billion as at June 30.
The company is developing its Xinfu yard in China’s Taixing city, which is expected to have an annual capacity of 3 million DWT when fully operational, as well as the land and wharf at its New Yangzi yard in Jingjiang city.
“Inclusive of land and wharf at the New Yangzi yard and the Xinfu yard, our capacity will be able to double by 2013,” Ren told Reuters in an interview. He added that the expansion will be funded through the firm’s cash and bank loans.
“We are still able to secure orders amidst the current market outlook because of the support of Chinese banks as well as our new product types -- the 4,800 and 10,000 TEUs — which are widely accepted in the market,” Ren said.
Yangzijiang reported a 20% year-on-year increase in its second-quarter net profit to 963.9 million yuan. Net profit margin stood at 30.5%, compared with 26% a year earlier. As at June 30, the firm had cash and cash equivalents of 2.8 billion yuan.
In its second quarter, it secured US$700 million ($850.2 million) contracts from Seaspan Corp (SSW.N) to build seven 10,000 twenty-foot equivalent unit (TEU) container ships, with options for 18 more valued at US$1.8 billion.
Yangzijiang’s order book stood at 126 vessels with a total value of US$5.5 billion as at June 30.