Ge Long Hui·2025-11-01 13:04Core Viewpoint - China Shipbuilding Defense reported a significant increase in revenue and net profit for the first three quarters of 2025, indicating strong operational performance and a solid order backlog [1][2]. Financial Performance - Revenue for the first three quarters reached 14.3 billion yuan, a year-on-year increase of 13% [1] - Net profit attributable to shareholders was 660 million yuan, up 250% year-on-year [1] - In Q3 2025, revenue was 4.1 billion yuan, reflecting a 5% year-on-year growth, while net profit was 130 million yuan, a 219% increase year-on-year [1] - The company recognized an asset impairment of 150 million yuan in Q3 2025 due to the planned sale of a leasing platform, but after impairment reversal, net profit for Q3 was approximately 280 million yuan, aligning with expectations [1] Order Backlog and Delivery - The current order backlog stands at approximately 2.67 million CGT (compensated gross tonnage) valued at 7 billion USD [1] - Expected deliveries for 2026-2027 are 550,000 and 670,000 CGT, with year-on-year changes of -10% and +21%, corresponding to order values of approximately 9.7 billion and 12.7 billion yuan, with year-on-year changes of -2% and +32% [1] - The deliveries primarily consist of high-value orders signed in 2023-2024, indicating a continued release of profits [1] Market Conditions - Second-hand ship prices have surpassed pre-recession highs, suggesting a potential upward trend in new ship prices [2] - The Chinese Ministry of Transport introduced special port fees for certain U.S. vessels, which may lead to a continued influx of shipbuilding orders back to China [2] - The U.S. has announced a one-year suspension of its maritime, logistics, and shipbuilding industry investigations against China, which may further improve the shipbuilding sector's fundamentals [2] Competitive Landscape - Attention is drawn to the progress of China Shipbuilding Group in resolving intra-group competition between China Shipbuilding and Huangpu Wenchong, with a commitment to address this within five years [2] Investment Outlook - The profit forecast for the company remains unchanged, with projected net profits of 1.1 billion, 1.7 billion, and 2.8 billion yuan for 2025E-2027E, corresponding to PE ratios of 18, 11, and 7 times [2] - The current price-to-order ratio is 0.39, which is at a low level compared to the current shipbuilding cycle, maintaining a "buy" rating [2]