China’s Top Private Shipbuilder Rebounds from USTR Port Fee Shock

Shares in Chinese shipbuilder Yangzijiang Shipbuilding, the largest private shipbuilder in China, have fully recovered from earlier setbacks triggered by U.S. trade policy changes targeting Chinese-built ships, according to a new HSBC Global Investment Research

The analysis by Parash Jain, HSBC’s Global Head of Transport & Logistics Research, highlights promising fundamentals for the company despite broader industry concerns.

Jain notes that “Yangzijiang’s share price has reclaimed all losses since USTR-triggered sell-off earlier this year, as the market was encouraged by solid margin outlook and renewed contracting activities.”

The April 2025 U.S. Trade Representative policy introduced a tiered fee structure on Chinese vessels and operators calling at U.S. ports, part of a broader effort to challenge China’s maritime dominance and boost American shipbuilding. The policy includes fees based on net tonnage for Chinese vessels entering U.S. ports, with gradual increases scheduled through 2028.

Despite these trade headwinds, HSBC maintains a “Buy” recommendation for Yangzijiang, raising its target price to SGD3.80 from SGD3.30, citing the company’s margin expansion trajectory and potentially milder-than-expected contracting downcycle.

“We continue to expect steady margin expansion in 2025 and onwards, driven primarily by the gradual execution of more profitable orders, muted steel prices movement amidst sluggish domestic demand, and operational and cost efficiencies,” the report states.

A key factor in Yangzijiang’s positive outlook is the company’s recent contracting activity, which has helped to alleviate market concerns about potential USTR-related headwinds. According to the report, “Recent order wins by YZJ of 22 vessels valued USD0.92bn on 29 August brought YTD contracting level to 36 vessels or USD1.46bn.”

The global shipbuilding industry has not experienced the severe downturn some analysts predicted for 2025. HSBC notes that “Contracting activities have not come off a cliff in 2025 vs previous cycles,” partly due to increased demand for smaller containerships in the feeder vessel segment. The report also points to potential growth opportunities in dry bulk and tanker newbuilding as these sectors contend with aging fleets.

On the valuation front, Yangzijiang currently trades at significant discounts to its Korean competitors despite what HSBC describes as a “superior margin profile.”

The report comes amid a complex period for the global maritime industry, which is navigating geopolitical tensions, regulatory shifts, and varying regional demand patterns. The U.S. trade measures announced in April represented a scaled-back version of earlier proposals, including a fee remission pathway for operators who commit to purchasing U.S.-built vessels.

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 107,679 members