Shares of Yangzijiang Shipbuilding (Holdings) Ltd tumbled sharply on Friday, closing down 6.2% at S$3.16. Trading volume was heavy, with over 51 million shares changing hands as the broader Straits Times Index declined 0.8%.
Maersk Warning Rattles Sector
The sell-off was triggered by a downbeat outlook from Danish shipping conglomerate A.P. Moller-Maersk. The company projected its 2026 EBITDA in a range of US$4.5 billion to US$7.0 billion and announced plans to cut approximately 1,000 corporate jobs. CEO Vincent Clerc cautioned that an influx of new vessels and a potential return to Red Sea routes could pressure freight rates.
Analysts noted that longer vessel lifespans are adding to global shipping capacity, contrary to hopes for increased scrappage. This environment leads shipowners to delay new orders and negotiate harder on prices, directly pressuring shipbuilders like Yangzijiang.
Broader Risks and Context
Beyond cyclical freight rates, Yangzijiang faces other risks. In a late-September filing, the company disclosed it canceled contracts for four tankers worth roughly US$180 million due to "critical information" related to potential U.S. sanctions evasion by the buyer.
Despite the drop, Yangzijiang's stock remains well above the lower end of its 52-week range of S$1.80 to S$3.75. The company's revenue is recognized based on the progress of completed shipbuilding projects, which include container and cargo vessels.
Market attention now turns to Monday's session on the Singapore Exchange for signs of whether the decline was a one-day event or the start of a deeper correction. Traders are also monitoring Maersk's share buyback program, set to begin February 9. Yangzijiang's next major update is expected with its financial results, currently scheduled for March 3.
