S’pore-listed Yangzijiang Shipbuilding shares tumble after US proposes port fees for Chinese-built vessels
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Other Chinese shipbuilders and shipping companies were also hit.
PHOTO: YANGZIJIANG SHIPBUILDING
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SINGAPORE - Shares of mainboard-listed Yangzijiang Shipbuilding tumbled for a second straight day after the United States Trade Representative’s (USTR) office proposed imposing a fee on Chinese-built vessels entering US ports.
The stock closed down 9.7 per cent, or 29 cents, to $2.70 on Feb 25, with a hefty 79.7 million shares traded. A day earlier, the counter slumped 7.1 per cent.
Other Chinese shipbuilders and shipping companies were also hit. Hong Kong-listed Cosco Shipping Holdings dropped 1.4 per cent, extending a 4.6 per cent fall a day earlier, while Orient Overseas (International) declined 0.8 per cent, after a 3 per cent loss the previous day.
The USTR in a notice published on Feb 21 laid out its proposed fees and other shipping restrictions
These include port entrance fees of up to US$1 million (S$1.34 million) per vessel owned by Chinese maritime transport operators, or a US$1,000 charge per net tonne on the vessel’s cargo capacity.
Non-Chinese maritime transport operators operating Chinese-built vessels would pay up to US$1.5 million per port entry, while those with more than 50 per cent Chinese-built ships in their fleet would pay US$1 million per entry regardless of origin.
The fee drops to US$750,000 for fleets with 25 per cent to 50 per cent Chinese-built vessels, and US$500,000 for fleets with less than 25 per cent.
Other proposals include mandating that a portion of US exports be shipped on US-flagged vessels, or America-built ships.
The proposals come amid a US probe into China’s shipping dominance over the past two decades. A January report by the USTR said that China’s share of global shipbuilding tonnage had surged to more than 50 per cent in 2023, from 5 per cent in 1999.
In contrast, US shipyards built 70 ships in 1975, but now produce just five per year.
Yangzijiang Shipbuilding is one of the largest non-state-owned shipbuilding companies in China. It runs four shipyards in Jiangsu province, producing a range of vessels including oil tankers, bulk carriers and liquefied natural gas carriers.
The company has an order book valued at around US$22 billion, according to a bourse filing in November 2024.
A Straits Times Index component and considered a blue-chip stock, the company was among the top picks by institutional investors on the Singapore Exchange in 2024.
The company posted a net profit of 3.06 billion yuan (S$566 million) for the six months ended June 30, 2024, an increase of 77.2 per cent from the year-ago period. Revenue grew 15.3 per cent to 13 billion yuan.
On Feb 24, Yangzijiang Shipbuilding’s listed investment subsidiary – Yangzijiang Financial – posted strong earnings for the second half ended Dec 31, 2024, registering a net profit of $197.3 million, an increase of about four times from $39.3 million a year ago. Yangzijiang Financial shares ended unchanged at 56.5 cents on Feb 25.
Yangzijiang Shipbuilding is expected to report its full-year earnings by Feb 28.
