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 Group Research has maintained its "buy" call and $4.55 target price for Yangzijiang Shipbuilding after news that it plans to acquire a 10% stake in one of its long-time customers, which accounts for around 10 to 15% of its order book.
Under terms of a deal announced on March 10, Yangzijiang will pay US$825.7 million in cash for the stake in Poseidon Corp, indirect parent company of the customer, Seaspan Corp. The acquisition will be funded entirely from Yangzijiang's existing net cash of some US$3 billion.
