OCBC Investment Research downgraded its rating on Yangzijiang Shipbuilding (Holdings) Ltd to hold from buy and lowered its price target to S$1.23 from S$1.51.
Yangzijiang shares were up 0.9 percent at S$1.19 and have gained more than 30 percent so far this year.
OCBC said about 70 percent of its new order estimate of $2.5 billion for Yangzijiang's 2012 fiscal year depends largely on the 18 orders from Seaspan Corp, resulting in a higher concentration risk.
"Though the share price may see a positive knee-jerk reaction when the orders turn effective, we believe that the risk-reward ratio is currently biased against investors, unless the general shipbuilding market turns for the better," OCBC said.
Newbuild prices are still trending lower, OCBC said, adding that though Yangzijiang is diversifying into the offshore industry, it still has to traverse a learning curve before there can be a contribution to earnings.
1456 (0656 GMT)
(Reporting by Leonard How in Singapore; firstname.lastname@example.org)