Seaspon Corp is described as the world’s largest independent containership lessor, leasing out ships to shipping lines on multi-year fixed rates, which provides clear cash flow visibility. DBS calls it the "landlord" of the ocean.
DBS says Seaspan is the world’s largest independent containership lessor with a young, scaled fleet of 190 vessels totalling 1.92 million TEU, equivalent to around 6% of global containership capacity and around 14% market share of leased containerships.
Yangzijiang explains that by taking this strategic stake in a major customer, it can have better visibility on the industry dynamics, as it will have a board seat upon completion of the deal.
In parallel, an entity privately controlled by Yangzijiang's executive chairman Ren Letian, is taking a separate 5% stake in Poesidon Corp as well.
Seaspan’s earnings have compounded strongly in the past five years, with PATMI rising from US$134 million in FY2020 to US$740 million in FY2025 as the fleet grew from 127 to 190 ships and from 1.07 million to 1.92 million TEU, supported by strong container markets and long-term contract coverage.
DBS says that Seaspon has a clear growth path ahead with 70 vessels on order, which will increase its fleet size by 36% to 2.62 million TEU by FY2028, providing earnings growth visibility over the next three years.
At the purchase price of US$825.7 million, the deal is valued at 1.8x Seaspan's FY2025 book value of US$459 million, and 11.2x its FY2025 net profit of US$74 million.
From the perspective of DBS, this deal seems "justifiable" given the ROE of around 17% and 21% earnings CAGR during 2021-2025 and potential 10% CAGR ahead, backed by fleet growth.
DBS estimates that the acquisition will accrete annualised profit of over RMB 300 million, or 3% of Yangzijiang's bottom line, and lift ROE by 0.8 percentage points.
"More importantly, the investment strengthens a long‑standing shipowner relationship and supports vertical integration along the containership value chain.
"Being on the board of a large, growing and relatively young fleet owner gives Yangzijiang line‑of‑sight into replacement and growth needs, improving orderbook visibility and reducing yard cyclicality," says DBS.
As at 9.04 am, Yangzjiang Shipbuilding shares gained 2.22% to trade at $4.14.
