Singapore’s shipbuilding and marine engineering giants, Seatrium (SGX: S51) and YZJ Shipbuilding (SGX: BS6), have taken different paths in recent years.
After its mega-merger, Seatrium is still attempting to steady its footing – offering investors a potential turnaround story.
YangZiJiang Shipbuilding, or YZJ, is already flourishing.
But which one of the two offers a better buy now, to ride this shipbuilding wave?
Seatrium — The Rebuilding Giant
Born in 2023, when Sembcorp Marine and Keppel Offshore & Marine merged, Seatrium has become Singapore’s largest offshore and marine engineering player – and it’s steering away from fossil fuels to focus on cleaner energy and offshore renewables.
This transition is gaining steam.
For the first half of 2025 (1H2025), Seatrium recorded a 34% surge in revenue to S$5.4 billion.
Gross margin doubled to 7.4%, contributing to the four-fold improvement of net profits to S$144 million.
As at 30 June 2025, its net order book stands at a robust S$18.6 billion, of which S$6.3 billion (34%) is for green energy solutions or renewables.
Deliveries for this order book stretch till 2031.
Of the 25 current projects on hand, Seatrium has 11 active deliveries related to offshore wind, 12 floating production, storage, and offloading units (FPSOs) and floating production projects for oil and gas works, and a single vessel to be delivered for LNG (liquified natural gas)-related works.
In 1H2025, Seatrium’s deleveraging efforts have led to a 10% reduction in gross debt (currently amounting to S$2.4 billion as at 30 June 2025).
The company has S$3.5 billion in cash and undrawn facilities.
Net operating cash flow was zero, a significant turnaround from 1H2024’s outflow of S$(1.0) billion.
Management remains committed to reducing costs and enhancing efficiency to drive profitable growth.
The key takeaway for investors is that Seatrium’s recovery hinges on strong execution and successful vessel deliveries, which could lead to soaring earnings.
YZJ Shipbuilding — The Steady Compounder
YZJ, China’s largest shipbuilder, stands above its peers with an impressive order backlog and superb cost control.
The shipbuilder’s expertise lies in the container, LNG, and bulk carrier segments.
As of 30 June 2025 (1H2025), its latest order book value stood at a massive US$23.2 billion (74% is for green-energy ships), with deliveries spanning from 2025 to 2030.
This strong order book has roughly three to four years of forward revenue visibility.
YZJ is exceptionally profitable, with a net margin of 25% for the full year ended 2024 (FY2024).
The shipbuilder’s regional peers of Hanwha Ocean Co. Ltd (KSE: 042660), HD Korea Shipbuilding & Offshore Engineering Co., Ltd. (KSE:009540), and COMEC (SEHK: 0317) have profit margins ranging from 1.9% to 4.9% over the same period.
Through cost control and favourable contract pricing, YZJ reported an improved net profit margin of 32.5% for 1H2025.
YZJ’s shipyards were operating at full capacity at the end of 2024.
The expected completion of its Project Hongyuan expansion (end 2026) should lead to higher production efficiency.
For 1H2025, YZJ’s efficient shipyards have led to higher gross margins of 34.5%, up from 26.7% in the previous year.
The key takeaway is that YZJ is a seasoned operator in a highly cyclical sector where it is easy to go bust. YZJ continues to deliver steady growth and strong profitability.
Comparing the Two: Scale vs Stability
Seatrium offers turnaround potential and leverage to global energy infrastructure growth, while YZJ offers reliable dividends and operational stability.
Let’s compare some key metrics of both companies:
| Company | Seatrium Limited (SGX: 5E2) | YZJ Shipbuilding (SGX: BS6) |
| Order Book Value | S$18.6 billion | S$30.2 billion |
| Order Book Duration | 6 Years (2025-2031) | 5 Years (2025-2030) |
| Revenue Visibility | ~4 years | ~3 years |
| Gross Margin | 7.4% | 34.5% |
| Net Margin | 2.7% | 32.5% |
| Net Gearing | 0.1x | Net Cash |
| Cash Position | S$1.5 billion | S$4.4 billion |
| Dividend Yield (Trailing) | 0.7% | 3.5% |
| Dividend Payout | 19.3% | 33.0% |
| Forward Price-to-Earnings (P/E) | 15.3x | 8.6x |
| Price-to-book (P/B) | 1.1x | 2.7x |
Note: YZJ reports in USD and RMB. USD/SGD = 1.30 RMB/SGD = 0.18
The key takeaway is that Seatrium is a higher-risk, higher-reward turnaround story, while YZJ offers strong profitability.
Industry Outlook: Winds Turning in 2025/2026
Policies requiring reductions in ships’ emissions (eventually net-zero by 2050), combined with the global energy transition that increases demand for LNG, have fuelled the shipbuilding boom.
A desire to mitigate inflationary costs brought about by higher oil prices (as seen in 2022) alongside lower interest rates, could boost capital spending on offshore wind projects, supporting demand for offshore wind vessels.
The demand for new builds of low-emission vessels should remain anchored by higher public green spending and fleet replacement needs.
The key takeaway is that both companies can benefit from these favourable conditions.
The question that matters is whether they can execute and control their costs.
What to Watch in 2025/2026
For Seatrium, investors should watch for contract order inflows and overall margins. Seatrium also has to continue deleveraging its balance sheet.
Meanwhile, YZJ’s pricing power on newbuild vessels and its continuous ability to benefit from production efficiency and reliable dividend payments are key factors to monitor.
Key risks for both include higher costs, the loss of contracts and economic downturn.
Potential key catalysts include the first profitable year for Seatrium or order book expansion for YZJ.
What This Means for Investors
Seatrium is a company whose current operations can be more volatile.
However, it has the potential for outsized gains if it can execute its turnaround while deleveraging its balance sheet.
YZJ represents a safer compounding option, better suited for income and moderate growth investors.
Get Smart: Which Stock to Buy Depends on Your Risk Profile
If you favour their turnaround prospects, Seatrium is your horse.
If you want something more stable, consider YZJ.
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Disclosure: Wesley does not own shares in any of the companies mentioned.
