Yangzijiang Shipbuilding Holdings’ shares rose to a record on Friday after the company reported a 26% jump in net profit as its shipbuilding margin improved.

Shares climbed 1.9% to 1.58 Singapore dollars (US$1.18), their highest intraday level since the company’s listing.

The shipbuilder’s first-half net profit rose to 1.73 billion yuan (US$241.4 million) from CNY1.37 billion a year earlier on the back of an all-time high outstanding order book of US$14.7 billion.

Citi analyst Jame Osman said in a note that Yangzijiang’s core gross shipbuilding margin at 18% was a “key positive surprise,” driven by higher-priced orders, the backdrop of a stronger U.S. dollar and moderating steel prices.

Osman expects the company to update its full-year order win target, as the company’s year-to-date order wins of $5.7 billion has already far exceeded the company’s initial $3 billion target.

Osman said Yangzijiang’s margins could continue to improve this year as the shipbuilder works through its larger orders, which would benefit from economies of scale on repeat orders.
Source: Market Watch