These combination carriers can carry both wet and dry cargo. By doing so, the ships can be run more efficiently than single-purpose vessels, as the combination carriers can have a better chance of being used on both legs of the journey.
The market has reacted positively to the news, sending Yangzijiang shares up 7 cents, or 4.69% higher to $1.34 as at 10.33am on June 26.
Between 2019 and 2021, Yangzijiang has already delivered eight combination carriers to the Norway-based customer.
According to Yangzijiang, the new vessels will be equipped with greater fuel-efficient solutions such as wind-assisted propulsions, are to replace KCC's order vessels.
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Company executive chairman and CEO Ren Letian says he is "grateful" for the "immense trust" given by the customer with this repeat order.
"In addition, the inherent efficiency of combination carrier design will also help reduce the carbon footprint of the industry due to the reduction of idle sailing," he adds.
In its most recent order book update for 1QFY2023 ended March, Yangzijiang says it has a total order of US$10.98 billion, including US$1.18 billion won year to date.
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In a note on June 26, DBS Group Research estimates that the contract value of these vessels is around 60% higher than traditional single-purposed Panamax dry bulk carrier given the additional functionality.
"We believe the group is well on track to meet its contract win target of US$3 billion for 2023," says DBS, which has reiterated its "buy" call and $1.70 target price, which is based on 1.7x FY2023 price to book ratio, and a 10.8x FY2023 PE ratio.
