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Cosco is one of China's leading diversified services companies, focusing largely on shipping and logistics.
The deal caps a stellar year for Yangzijiang. Its initial public offering (IPO) in April was the year's largest on the Singapore Exchange (SGX) at close to $1 billion.
The deal, for 20 ships that can carry 4,250 standard boxes, includes options for four more vessels. The vessels are to be delivered between August 2011 and June 2012.
And while the contract is not expected to have a significant impact on the group's earnings for the financial year ending Dec 31, the deal is still important given Cosco's status as one of Asia's largest container transporters.
Earlier this year, Yangzijiang had offered nearly 993.2 million shares at 95 cents each - 19.86 million units for public offer in Singapore and 973.33 million for international placement. The offer raised about $943.5 million.
This made it the biggest offering in Singapore since the $1.6 billion Thai Beverage flotation last May. UBS Investment Bank was global coordinator and sole bookrunner for Yangzijiang's IPO.
Based in Jiangyin city in Jiangsu province, Yangzijiang produces a wide range of vessels, including commercial craft, bulk carriers and chemical tankers.
It sells its products in China and overseas, including to Germany, Britain and Singapore.
The company's shipyard spans 200,000 sq m, but the firm plans to build a new yard covering 793,000 sq m, including a dry dock.
Executive chairman Ren Yuanlin said earlier that the listing will generate funds needed to propel the company into the next stage of growth.
This included plans to expand by building larger vessels and diversifying into offshore craft.
Yangzijiang recorded revenue of 2.3 billion yuan (S$455 million) last year and earnings of 453 million yuan.
Its revenue has grown at a compounded annual rate of about 53 per cent from 2004 to last year.
The company's shares ended up eight cents at $1.93 yesterday, with 33 million units changing hands, making it the sixth most- heavily traded counter on the SGX. The share price had gone as high as $2.74 in mid-October.
