On Tuesday, JPMorgan analysts adjusted their stance on YZJ Shipbldg SGD , downgrading the company from Overweight to Neutral. The new price target set by the firm is SGD3.00, a decrease from the previous target of SGD3.30. The decision comes as the shipbuilding industry faces significant changes, influenced by the US government's investigation into China's maritime practices, which may reshape global trade dynamics.

The JPMorgan analyst pointed out that the shipbuilding sector is in the midst of a cycle, with certain segments exhibiting varying levels of activity. The container shipping segment appears to be reaching its peak, while bulk and tanker shipping are just beginning their capital expenditure cycles. Additionally, more investment is anticipated in LNG carriers due to planned energy investments in the US. However, new build prices are staying high because of limited yard capacities.

An industry expert, Lars Jensen, has raised concerns that the proposed US measures could place heavy economic burdens on American exporters and importers. This could be a result of disruptions in supply chains and the passing on of costs. The measures are seen as a potential source of negative sentiment towards Chinese shipyards.

Despite this backdrop of uncertainty, Yangzijiang Shipbuilding's shares have performed remarkably well, having increased by 100% since the beginning of 2024. This growth significantly outpaces the FSTAS Index's 17.5% rise over the same period. The stock's robust performance comes amid the broader challenges facing the industry and the specific concerns highlighted by the US investigation into maritime practices.