航海装备Ⅲ：上行周期重组，合力行至更远

Investment Rating - The industry rating is "Outperform the Market" [5] Core Viewpoints - The recent decline in the shipbuilding sector was primarily due to the restructuring plans of two major companies falling short of expectations, negatively impacting China Shipbuilding Industry Corporation (CSIC) and leading to a broader market downturn. However, this presents a favorable investment opportunity given the ongoing upward cycle in the shipbuilding industry [1] - The shipbuilding industry is currently in an upward phase, with the new ship price index in September rising by 9 points since the beginning of 2024 and by 63 points since the beginning of 2021, indicating a clear upward trend. The average age of the global three major ship types is approximately 16 years, suggesting a growing demand for ship replacements in the coming years [1] Summary by Sections Restructuring Impact - Following the merger, China Shipbuilding's global market share is expected to increase to over 30%, with potential expansion to 31.4% if all shipbuilding assets of CSIC are integrated. This will solidify the company's position in the global shipbuilding industry and enhance its ability to secure more international orders [2] Market Valuation - Post-merger, the estimated market valuation for China Shipbuilding ranges from 250 billion to 400 billion CNY. Based on a lower price-to-order (P/O) ratio of 0.8, the market value is approximately 246.5 billion CNY. If the P/O ratio rises to 1, the market value could reach 308.2 billion CNY, and in an optimistic scenario (1.2 P/O), it may exceed 370 billion CNY. With the inclusion of Hudong-Zhonghua and Huangpu Wenchong, the market value could surpass 400 billion CNY, indicating significant growth potential [3] Investment Recommendations - Key follow-up points include the handling of non-shipyard assets by China Shipbuilding, the equity arrangement for China Shipbuilding's diesel engines, and the integration plans for Hudong-Zhonghua and China Shipbuilding Defense. Recommended companies to monitor include China Shipbuilding, China Power, China Shipbuilding Industry Corporation, and China Shipbuilding Defense [4]