Yangzijiang Shipbuilding (Holdings)

[weijian]

After a hiatus more than 2 years, YZJSB has started SBB again. To date, they have spent ~30mil in the last 2-3 weeks since Liberation day. This is still much less than the money spent in prior years between 2018-2022.

The majority of the shares bought in earlier years were used to fully owned a subsidiary shipyard and meet the obligations of a 50mil convertible bond. As end FY24, there is plenty of cash on its BS even after all the recent CAPEX announcements (new shipyard + LNG terminal) and the amount of customer deposits has also given it a negative working capital (receivables/contract assets/inventories minus off customer deposits/payables) like that of a grocer!

It will be interesting to see the extent of the current SBB and also how they will eventually use these treasury shares.

Share buy-back by way of market acquisition.

https://links.sgx.com/1.0.0/corporate-an...3d8493926b

[weijian]

YZJSB share price has recovered from its Liberation Day lows and it was also during those lows that Chairman Ren astutely did SBB. However, SBB has stopped as company has turned cautious and decide to prioritize conservation of cashflows for its current expansion programs.

MINUTES OF THE NINETEENTH ANNUAL GENERAL MEETING

2. Please provide some insight into whether any customers have deferred or cancelled orders? How is the Group’s capital allocation? What are the approaches the Group prepares to navigating U.S. tariffs and global market uncertainties?

Based on the records, the Company’s existing order book has remained stable. As at the date of this AGM, none of the clients raise concerns regarding order cancellation, delivery delays. The Company remains committed to maintaining a dividend payout ratio of 30% to 40% of net profit annually.

With respect to capital expenditure, the two major projects are currently working in progress: (i) the capacity expansion on the land adjacent to the Xinfu Yard, Project Hongyuan, and (ii) the Project of LNG Terminal Conversion and Storage Facilities. The total capital expenditure for both projects is within RMB 5 billion.

On the share buyback programme, the Company remains committed to buy-back shares during periods of share price volatility to safeguard the Shareholders’ interests. Nevertheless, in view of ongoing macroeconomic uncertainties, the Company will prioritise the preservation of cash flow to support future strategic initiatives with its prudent capital management strategy.

5. Has the Group secured any new orders amid the prevailing market uncertainties?

The current tariffs and related trade measures have not affected the Group’s existing order book. However, they have influenced the sentiment of prospective clients and have led to delays in finalising new contracts. While several Letters of Intent for new shipbuilding orders have been executed, some clients have requested to defer their confirmation and pending greater clarity on the outcome of the ongoing trade negotiations between the United States and China

The tariff situation has primarily affected the vessels designated for the US market. However, the Group has received a rise in inquiries for smaller-sized container vessels, particularly in the 3,000 – 4,000 Twenty-Foot Equivalent Units (“TEU”) range. This increase in interest was partly driven by recent regulatory changes, which exempt Chinese-built vessels below 4,000 TEU from certain port fees in the US

https://links.sgx.com/FileOpen/YZJSH%20-...eID=846160

[weijian]

So YZJSB is buying a stake in its customer. But since shares are not issued, it is not circular financing à la Jensen Huang style. The shares are been bought at a "above fair but reasonable price".

From other reporting, it seems like the existing vendors (Fairfax Financial and certain affiliates of the Washington Family) are selling out mainly to 3 parties - an existing shareholder (Ocean Network Express, a Jap container line) who will increase their stake and 2 "new strategic investors". The 2 new strategic investors are probably YZJSB and Chairman/CEO Ren Letian (on his individual basis).

While this parallel acquisition by YZJSB and Chairman/CEO Ren Letian has not broken any rules nor triggered any interested party transaction as per listing rules, but I would think that why would Chairman/CEO Ren Letian invest along? Wouldn't it be better to have YZJSB to invest alone, especially if they have the resources to do so, so as to avoid any future potential conflict of interest (or perception of so)? Think of the Boustead Singapore-Boustead Projects spin-off/take over.

But from another viewpoint, OPMIs will probably stand to benefit if Chairman/CEO Ren Letian requires money on his personal capacity for investment, as it means he will continue to declare more dividends out of YZJSB's retained earnings.

PROPOSED ACQUISITION OF 10% INTEREST IN POSEIDON CORP. ("POSEIDON")

Seaspan Corporation owns and operates containerships by primarily long-term time charters to major container liner companies, and has been a long-standing customer of the Group. Seaspan Corporation is wholly owned by Atlas Corp., which is wholly owned by Poseidon. Seaspan Corporation is an existing, long term and important customer of the Group. The Board is of the view that the Acquisition will further strengthen the Group’s strategic
relationship with Seaspan Corporation and support closer long-term collaboration.

The parties to the SPAs have agreed on an aggregate consideration in total of USD 825.7 million (the “Consideration”) for the Acquisition Shares.

The Company engaged Kroll as its independent financial adviser to conduct financial due diligence and valuation analysis in relation to the Acquisition. In its report dated 24 February 2026, Kroll ascribed a valuation in the range of approximately USD660.6 million to USD810.9million for the 10% equity interest in Poseidon, based on the Market Approach (Guideline Public Company Method) and the Income Approach (Discounted Cash Flow Method).

The Company is notified that Hengyuan Asset Investment Limited (“Hengyuan”), a private investment vehicle owned and controlled by Mr. Ren Letian, the Company’s Executive Chairman and Chief Executive Officer, will be participating in the Broader Transaction as one of the purchasers of shares of Poseidon, on substantially the same terms as those of the Company, to acquire a 5% equity interest in Poseidon (“HY Acquisition”). Hengyuan does not have an existing equity interest in Poseidon prior to completion of the Broader Transaction.

https://links.sgx.com/FileOpen/YZJ%20Ann...eID=877992