Shares in China’s largest private shipbuilder, Yangzijiang Shipbuilding, have rebounded after suffering a drop due to U.S. port fee policies, according to a new report from HSBC Global Investment Research.
Parash Jain, Global Head of Transport & Logistics Research at HSBC, noted in his analysis report: “Despite industry-wide challenges, Yangzijiang Shipbuilding’s fundamentals continue to demonstrate positive prospects. Bolstered by robust profit outlooks and gradually recovering new ship order activity, market confidence has strengthened, enabling Yangzijiang Shipbuilding’s stock price to fully recover all losses incurred earlier this year due to policies implemented by the Office of the United States Trade Representative (USTR).”
In April 2025, the USTR announced a tiered fee system for Chinese vessels and operators calling at U.S. ports, stating the measure aims to “curb China’s dominance in maritime shipping” and boost the U.S. shipbuilding industry. The policy mandates that Chinese vessels entering U.S. ports pay fees based on net tonnage, with plans to gradually increase the fee structure by 2028.
Despite trade headwinds, HSBC maintained its “Buy” rating on Yangzijiang Shipbuilding and raised its target price from S$3.30 to S$3.80, citing the company’s robust profit margin expansion and a milder-than-expected decline in orders.
The report states: “Yangzijiang Shipbuilding’s profit margins are projected to rise steadily and consistently starting from 2025. Key drivers include: the gradual delivery of high-margin orders, limited steel price volatility due to weak domestic demand, and improvements in operational efficiency and cost control.”
Yangzijiang Shipbuilding’s positive outlook hinges on its recent new ship orders, which will alleviate market concerns about potential adverse factors related to the USTR. On August 29, Yangzijiang Shipbuilding announced new orders for 22 vessels worth US$920 million, bringing its total new orders this year to nearly 40 vessels valued at approximately US$1.5 billion.
According to Yangzijiang Shipbuilding’s “2025 First Half-Year Financial Results” released on August 6, the company’s total revenue remained relatively stable at RMB 12.9 billion (approximately US$1.809 billion) during the reporting period, with shipping sector revenue reaching RMB 510 million (approximately US$72 million). Net profit attributable to shareholders surged 37% year-on-year to a record RMB 4.2 billion (approximately US$589 million) in the first half of 2025. During this period, the company achieved a new high in shipbuilding gross profit margin of 35%.
In terms of valuation, although HSBC believes that Yangzijiang Shipbuilding has “superior profit margins,” the company’s current stock price still trades at a significant discount compared to its South Korean peers.
Some shipbuilding professionals previously predicted a severe downturn in the global shipbuilding industry by 2025. However, HSBC’s report noted that “compared to previous cycles, ordering volumes in 2025 will not experience a precipitous decline,” due in part to growing demand for small containerships in the feeder shipping sector. Furthermore, the dry bulk carrier and tanker newbuilding markets, facing aging fleets, present growth opportunities.
The report comes at a time when the global shipping industry is navigating complex challenges, including geopolitical tensions, regulatory policy adjustments, and divergent regional demand patterns. The trade measures announced by the U.S. in April represent a more measured approach compared to earlier proposals, including the establishment of a fee waiver pathway for operators committing to purchase U.S.-built vessels.