Yangzijiang Shipbuilding Holds Steady Amid Global Trade Shifts

Refer to my earlier post of 16 July 2025 regarding "YZJ Shipbuilding: Where Value Meets Growth":

https://superphang.blogspot.com/2025/07/yzj-shipbuilding-where-value-meets.html

YZJ has entered into additional shipbuilding contracts for 22 vessels and the Group has secured a total of 35 effective shipbuilding contracts year to date with an aggregate value of US$1.46 billion.

Despite rising geopolitical tensions and new US trade measures, China’s Yangzijiang Shipbuilding is navigating 2025 with resilience and long-term strength. As part of efforts to boost domestic industry, the US Trade Representative has introduced higher port fees for Chinese-built vessels under Section 301 of the Trade Act, identifying China’s shipbuilding leadership as a strategic concern.

While this has led to temporary caution among global shipowners, Yangzijiang remains well-positioned. “Clients are waiting to see how the rules evolve,” says Ren Yuanlin, the company’s founder. Even so, with limited alternatives in South Korea and Japan due to labor shortages and rising costs, demand for China’s shipyards remains strong.

Shipbuilding remains a hands-on industry that can’t easily be automated, and Yangzijiang’s combination of technical know-how, capital, and skilled labor gives it a competitive edge. Ren is confident: “For every ship made in the US, I can make five in China. That’s our cost advantage.”

More importantly, Yangzijiang is leading the global shift toward greener shipping. Nearly 75% of its US$23.2 billion order book consists of eco-friendly vessels, driven by the International Maritime Organization’s goal of net-zero emissions by 2050. These orders, spanning delivery through 2030, offer solid revenue visibility and align with the global decarbonization agenda.

Analysts remain bullish. DBS and UOB Kay Hian both maintain “buy” ratings, highlighting the company’s strong order pipeline, high margins, and ability to turn signed intent letters into long-term contracts.

Despite near-term market uncertainty, Yangzijiang is charting a confident course—powered by green innovation, cost leadership, and global demand. As the industry evolves, it continues to sail ahead of the fleet.

Superphang
http://superphang.blogspot.sg

GME Group (HK:8188): 6-Week Performance Review - 15.2% ROI and Enhanced Dividend Yield

Refer to my earlier post on GME Group (HK:8188) dated 14 July 2025 where I recommended it when the price was at 92 cents:

https://superphang.blogspot.com/2025/07/gme-group-hk8188-deep-value-play-in.html

 

GME Group (HK:8188) closed at $1.06 today, 25 August 2025. The 1H2025 earnings declined by 5.2%, and the TTM P/E dropped to 6.13x from 5.92x, which still appears undervalued.

The company just declared a 5 HK cents dividend, with an ex-dividend date of 23 September and payment date of 31 October. This represents a 25% improvement over the 4-cent dividend for the same period last year.

The unrealised ROI since I recommended this stock approximately 1.5 months ago is now 15.2%. I will continue to hold this stock to collect the dividend and maintain my target price of HK$1.79 by July 2026.

Superphang
https://superphang.blogspot.com

Union Gas Soars 42% in a Day: Possible Privatization Ahead?

Union Gas surged from 39 cents to 55.5 cents on 4^th August, marking a 42.31% increase. The spike occurred during the post-market auction after 5 pm, as the stock had been hovering around 38 cents for most of the day before that.

I bought Union Gas on 2^nd July at $0.32 apiece, viewing it as a defensive play with a solid dividend yield—particularly attractive given its insulation from Trump’s reciprocal tariffs. My unrealized net ROI has now reached about 72.7% within about a month. I had not expected such a drastic surge in such a short time, especially since most of the gains happened in a single session.

Based on the chart, I estimate the next resistance level to be around 68 cents, calculated as the average between the recent trough and the peak on 28^th Jul 2021.

The company is 68% owned by the Teo family, and there is a possibility it may be taken private by them. As for me, I will sit back with some popcorn and wait for the price to approach that resistance level before deciding whether to divest.

Superphang
https://superphang.blogspot.com

Valuation Insight: Beng Kuang Warrant Trades Below Historical Premium Levels

Beng Kuang Marine W270904 (Z3RW) appears undervalued when considering its favourable characteristics: a sufficiently long time to expiration (more than 2 years remaining), high gearing ratio (25.5/7.5 = 3.4x), and relatively low premium of 15.69% ((7.5+22)/25.5 – 1) required to exercise the warrant and convert it to the underlying shares of Beng Kuang Marine (BEZ).

Warrant Premium Calculation

The standard formula for calculating warrant premiums is: (Warrant price + Exercise price) / Underlying share price = 1 + premium

More concisely: (W + E) / P = 1 + premium

Rearranging this formula, the warrant price W can be expressed as: W = (1 + premium) × P - E

Based on historical market data, when multiple warrants are trading in the market, the average premium typically ranges from 20% to 30%.

Valuation Analysis

Given the current parameters:

• Share price (P) = $0.255
• Exercise price (E) = $0.22
• Applying a 25% premium

The estimated fair warrant price would be: W = (1 + 0.25) × 0.255 - 0.22 = $0.09875  or 9.875 cents

Compared to the current warrant price of 7.5 cents, this suggests a potential upside of approximately 31.67%, even without any upward movement in the underlying share price.

Investment Outlook

The warrant price is likely to be appreciated further if the underlying share price rises. This scenario appears plausible given that Beng Kuang Marine is considered an undervalued opportunity with:

• Trailing twelve months (TTM) P/E ratio of 4.4x
• Classification as a penny stock, which often experiences significant gains during bullish market conditions like now
  
  

Price Target

I estimate the Beng Kuang warrant will reach 12 cents within 6 months, representing a potential upside of 60% from current levels.

Superphang
https://superphang.blogspot.com

A Hidden Gem with 152% Upside Potential and 8.54% yield

I purchased shares of Prosperous Industrial (1731.HK) at an average price of HK$0.752, driven by its strong earnings growth and attractive valuation metrics.

Prosperous Industrial is an investment holding company primarily engaged in the manufacturing and sale of sports bags, general bags, and luggage. Its products are sold across the North American, Asian, and European markets.

The stock closed on 18 July at HK$0.82, and its key investment highlights include:

P/E (TTM): 3.96x
Dividend Yield: 8.54%
ROE: 18.6%
Earnings Growth: Turned around in FY2020 and has since grown at a CAGR of 77.8% over the past four years

If the market begins to recognise the company’s fundamentals in the coming 6 months, we could see a re-rating in its valuation. A more reasonable P/E of 10x would imply a target price of HK$2.07, representing a 152% upside—or a 2.5-bagger from current levels.


Superphang
http://superphang.blogspot.sg

CGS (HK:6881) Could Jump 38% on Strong 1H Performance

China Galaxy Securities (HK:6881) announced on 15 July 2025 that it expects its attributable profit for the first half of FY2025 to increase by 45% to 55%, reaching between 6.36 billion yuan and 6.80 billion yuan, compared to 4.39 billion yuan in the same period last year, according to a filing with the Shanghai Stock Exchange.

The strong performance of the securities brokerage is attributed to growth across multiple business segments, including investment trading, wealth management, investment banking, institutional services, and others, the company said.

Assuming a 50% increase in full-year earnings, China Galaxy Securities (6881) could see its share price rise by 38.5% to $13.30 from the current level of $9.62, based on a conservative forward P/E of 9x. I believe this target is achievable within six months.

Superphang
http://superphang.blogspot.sg

YZJ Shipbuilding: Where Value Meets Growth

The main investment merits for YZJ Shipbuilding are as follows:

·       ROE skyrocketed to 28.1% in FY2024 (from 21.3% in 2023), highlighting its excellent capital efficiency.

·       Net profit surged 61.7% YoY to RMB 6.63 billion, driven by strong revenue growth and margin expansion.

·       Gross and net margins expanded significantly (~28.7% gross margin, ~25% net margin), thanks to favorable RMB exchange rates and lower steel prices.

·       With the current price at $2.37, the P/E is an attractive 7.55, and the dividend yield of 5.06% exceeds the CPF SA interest rate.

If new orders—particularly high-margin LNG carriers and tankers—slow down, margin pressure could quickly erode bottom-line returns. Additionally, favorable currency and material cost trends, such as a weak RMB and lower steel prices, may reverse, potentially affecting future profitability. Barring these risks, the stock price is likely to continue its upward momentum.

The solid 28.1% ROE confirms that YZJ is not just profitable, it is producing elite returns for equity holders. With robust margins, strong earnings growth, and highly attractive valuation multiples, YZJ stands out as a compelling blend of value and growth.

I estimate YZJ Shipbuilding will rise to $3.77 within the next six months, bringing it to a more reasonable valuation of 12 times its earnings and offering an upside potential of 59%. 


Superphang
http://superphang.blogspot.sg