Orders on Hand Are Robust, China State Shipbuilding's Net Profit Attributable to Parent Company Expected to Double in H1 | Financial Report Interpretation

Orders on hand for civilian ships are robust, and ship prices remain high. CSSC (600150.SH) is expected to double its net profit attributable to shareholders of the parent company in the first half of the year (H1).

Tonight, CSSC announced that it expects to achieve a net profit attributable to shareholders of the parent company between 2.8 billion yuan and 3.1 billion yuan for the first half of 2025, an increase of between 1.388 billion yuan and 1.688 billion yuan compared to the same period last year, representing a YoY increase of 98.25% to 119.49%. It also expects to achieve a net profit attributable to shareholders of the parent company, excluding non-recurring gains and losses, between 2.635 billion yuan and 2.935 billion yuan, a YoY increase of 119.89% to 144.93%.

In its announcement, CSSC stated that during the reporting period, the overall shipbuilding industry maintained a good development trend, and the company's order book structure was upgraded and optimized. The prices of civilian ships delivered during the reporting period increased YoY, and construction cost control was effective, leading to a YoY increase in operating gross profit. The operating performance of associated enterprises continued to improve.

A shipyard source told a CLS reporter that despite the decline in new orders received by Chinese shipyards this year due to overseas policy influences, orders on hand remain robust, with orders at mainstream shipyards basically scheduled until 2028. In the short term, overseas policy factors may affect investor decisions, but in the long run, the aging of ship fleets combined with the gradual maturity of market fuel supply will drive shipowners to place orders and invest, indicating a positive market development outlook.

The CLS reporter also recently visited CSSC Chengxi Shipyard, a subsidiary of CSSC, and learned that the current US Section 301 investigation has had no apparent impact on the shipyard's orders on hand. As of mid-June, the order-taking and profitability of each business segment at CSSC Chengxi Shipyard had exceeded half of their annual targets, with orders on hand reaching a new high. For medium-to-high-risk projects, such as those with collection risks or poor liquidity of the ship type, the shipyard purchases export credit insurance in advance.

According to Clarkson Research data, from the beginning of this year to now, the total global new ship orders have decreased by 54% YoY. The Clarkson Newbuilding Price Index has slipped by 1% YoY. Among them, the newbuilding markets for container ships (with new ship orders reaching 1.9 million TEUs), cruise ships, and ferries remain active; while investments in newbuilding projects for gas carriers and tankers have slowed down. New ship deliveries remain stable. In terms of delivery volume, Chinese shipyards account for 48%, Korean shipyards for 31%, and Japanese shipyards for 13%. However, the share of new ship orders for Chinese shipyards has declined, dropping from 70% in 2024 to 52%.