CSSC Holdings(SH:600150) Changjiang Securities·2024-06-17 03:31Investment Rating - The report maintains a "Buy" rating for China Shipbuilding [8] Core Views - The report emphasizes the upward trend of the shipbuilding industry cycle, with increasing ship prices and a structural recovery in oil and bulk carriers, indicating further upside potential [6][15] - The company has shown a significant improvement in profitability, with a turning point evident in its financial results, supported by a concentration of high-value orders and a reduction in loss-making contracts [8][56] - China Shipbuilding is positioned as a global leader in shipbuilding, benefiting from its R&D and technological advantages, as well as a strong order backlog that supports future earnings [8][56] Industry Overview - The shipbuilding industry is experiencing a clear upward trend, with a projected compound annual growth rate (CAGR) of over 10% in delivery value over the next decade, driven by replacement demand and environmental policies [6][21] - The global shipbuilding market is consolidating, with a significant concentration of orders among leading shipyards, enhancing the competitive landscape for China Shipbuilding [7][51] - The company is expected to benefit from the ongoing integration of assets within the shipbuilding group, which will help mitigate competition and enhance operational efficiency [8][56] Financial Performance - In 2023, the company reported revenues of 74.84 billion yuan, a year-on-year increase of 25.8%, and a net profit attributable to shareholders of 2.96 billion yuan, reflecting a substantial increase of 1614.7% [56][62] - The first quarter of 2024 showed continued growth, with revenues reaching 15.27 billion yuan, up 68.8% year-on-year, and a net profit of 400 million yuan, marking a significant turnaround [56][62] - The company’s gross and net profit margins have improved, indicating enhanced profitability and operational efficiency [58][64] Order Backlog and Market Position - As of the end of 2023, China Shipbuilding had a substantial order backlog, with 261 civil ship orders and 299 repair orders, positioning it well for future revenue generation [60][66] - The company is leading in the global shipbuilding market, with a share of over 55% in ship deliveries, and is expected to maintain this dominance in the coming years [51][56] - The report highlights the increasing demand for high-value ship types, which will further enhance the company's profitability as these orders are fulfilled [62][64]