Yangzijiang shipyard in China has secured 18 new contracts worth US$815 million, raising hopes that the company will win higher value-add projects, including mega containerships, semi-submersibles, LPG and LNG carriers.
"Yangzijiang continues to beat expectations when it comes to contract wins due to its strong execution, industry foresight and ability to move up the value chain more quickly than peers," said DBS (Development Bank of Singapore).
The new contract comprises thirteen 82,000 dwt bulk carriers, one 208,000 dwt bulk carrier and four 10,000-TEU containerships.
Including the latest order, Yangzijiang has secured 26 shipbuilding contracts with an aggregate value of $1.07 billion.
Building & Engineering, Shipping & Marine from Singapore estimates that this would lift its order book from $4.6 billion to $4.9 billion.
Order wins have been stronger than expected, forming 54 per cent of management's guidance of up to US$2 billion shipbuilding contracts this year given that the yard is already full until 2016.
"We understand that the majority of the 82,000 dwt bulk carrier orders would fill up additional slots that will become available in 2015 and 2016, as a result of efficiency improvement steps undertaken," DBS said.
"Another positive note is that Yangzijiang has managed to increase the price of 10,000-TEU ships to Seaspan by three per cent, a midpoint of the previous option price and current market price," said the report.
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