Yangzijiang Shipbuilding shares jump on plans for new manufacturing base in China

SINGAPORE - Shares of Yangzijiang Shipbuilding jumped on July 16, after it announced a framework agreement with the local government of Jingjiang City in China’s Jiangsu province to acquire land for the establishment of a new clean energy ship manufacturing base.

The land – which is about 866,671 sq m – is located in Xinqiao Park within the Jingjiang Economic and Technological Development Zone.

It features about 1,320m of Yangtze River shoreline, “offering a unique opportunity for efficient expansion”, said the company in a bourse filing on July 15.

The company said the land is strategically located adjacent to the existing Jiangsu Yangzi Xinfu Shipbuilding Company, which will enable it to “seamlessly integrate new facilities, thereby enhancing both productivity and operational efficiency”.

Its shares were up 16 cents, or 7 per cent, at $2.46 as at 1.31pm on July 16.

Yangzijiang Shipbuilding said it plans to invest an estimated 3 billion yuan (S$559.3 million) in capital expenditures over the next two years to complete this project, taking into account the long-term prospects of liquefied natural gas and other clean energy vessels.

This is subject to the group being satisfied with the outcome of the feasibility study on the project, which is currently being conducted.

Yangzijiang Shipbuilding added that the project’s implementation will be contingent on approval from various governmental agencies.

Following approval, the project will be executed in phases to ensure efficient resource allocation and compliance with regulatory requirements.

Shares of Yangzijiang Shipbuilding, which jumped to an intra-day high of $2.47, closed trading at $2.43, up 13 cents or 5.65 per cent, on July 16.

THE BUSINESS TIMES