[SINGAPORE] Shares of Yangzijiang Shipbuilding (YZJ) surged 15 per cent on Monday (Apr 21) morning before paring some gains, after the US watered down its initial proposal of slapping fees on China-built ships.
At 9.58 am, the counter jumped 15 per cent or S$0.31 to S$2.37, with 27.9 million securities changing hands. The last time it traded at such levels was Apr 2, and is currently still some way from its 52-week high of S$3.32.
The shares later gave up some gains to close at S$2.25, up 9.2 per cent.
The US eased port fees on China-built ships after pushback from the industry, it was reported on Apr 18. Yangzijiang had initially tumbled in February after the United States Trade Representative’s office proposed imposing a fee of up to $1.5 million per port call on China-built vessels entering US ports.
Shares of YZJ Shipbuilding have been on an upward trend since Apr 9, after Reuters reported that the US was considering softening its stance on the fees.
After the changes, the new fees will take into effect after 180 days, from Oct 14. The fees will not depend on how many Chinese-built ships are in a fleet, and domestic exporters and vessel owners working in the Great Lakes, Caribbean and US territories will be exempt from the fees. Foreign roll-on/off operators will also be able to refund fees if they order a US built ship within the next three years.
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Analysts at Citi said that these developments could partly lift market concerns over potential order cancellations or contract renegotiation.
“With lesser fees involved vs before and 180 days to adjust routes etc, there is room for the ship liners to manage costs and to pass through any additional costs to the end-receiver,” said analyst Luis Hilado.
YZJ also conducted a recent spate of share buybacks.
From Apr 11 to 16, it bought back five million shares for an average price of S$2.01 per share.
On Apr 15, YZJ Shipbuilding said shareholders will vote on its proposed final dividend at the company’s annual general meeting on Apr 29. The S$0.12 per share for the year ended Dec 31, 2024, will be paid on May 13.
On Apr 17, it announced that the record date for its parallel counter traded in renminbi had been revised from May 5 to 6, in light of the upcoming public holiday in China from May 1 to 5 which will affect the settlement of shares denominated in Chinese yuan. The revised record date ensures fair and accurate determination of entitlements across all currency counters, YZJ said.
