bullrider_21 commented on a stock · Apr 24 21:49

US scales back port fees, DBS Research reiterates target price of 3.80

The U.S. Trade Representative (USTR) has significantly scaled back initial proposals on hefty port fees targeting Chinese operators and Chinese built vessels, after industry backlash.

Effective Oct 14, 2025 (after a 180-day waiver), fees will apply once per voyage (not per port call; an Asia-US vessel typically makes three port calls per voyage) and are capped at five charges annually per vessel (a vessel could make 6-8 round trips on Asia-US routes).

The impact on large containerships is expected to be much less severe, with the port fees now projected to represent 5-6% of freight rates (rising above 10% by 2028), compared to the previously estimated 20-30% increase.

These more manageable port fees and more room for shipping companies / shipbuilders to manoeuvre should ease concerns about Chinese shipbuilding order cancellations and future ordering.

We expect the trend to impact tier two yards in China, driving further consolidation of Chinese shipbuilding industry with higher order concentration at top yards.

Ordering for top tier Chinese shipbuilders should be more resilient.

After all, China accounts for half of global shipbuilding capacity.

DBS reiterate their BUY call with SGD3.80 TP (2.5x PB; 11x PE).

While broad market is volatile with ongoing US-China trade war, we opine that Yangzijiang’s 30% selloff on port fee news is excessive.

As the world 3rd largest shipbuilder by orderbook and amongst the most profitable shipbuilders, Yangzijiang has wide economic moat and strong balance sheet to weather through near-term uncertainties and potential structural shift.

US scales back port fees, DBS Research reiterates high stock target price

Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more