Yangzijiang Shipbuilding's stock valuation appears undemanding to CGS International's Lim Siew Khee and Meghana Kande. The stock is trading at a 50% discount to peers, the analysts write in a note.

Shares gain 4.9% to S$3.42 on Wednesday.

Order wins are likely to be key catalysts for its shares, they add. The Singapore-listed shipbuilder has locked in most of its steel demand for next year at the current low costs, which could result in margin expansion, they say.

However, they note the Singapore-listed shipbuilder is facing stiffer competition from some Chinese yards. The analysts cut their order estimates for 2025 to $3 billion, citing the slower year-to-date order momentum. CGS International raises its target price to S$4.51 from S$3.90 and reiterates its add rating.