CSICL(SH:601989) Southwest Securities·2024-02-28 16:00Investment Rating - The report initiates coverage on China Shipbuilding Industry Company (601989) with a recommendation to "continue to pay attention" to the stock [4]. Core Views - The global shipbuilding cycle is on the rise, with new ship prices remaining high and significant differentiation among ship types [2][3]. - The company is expected to improve its profitability as it delivers previously contracted low-price orders and enhances production efficiency [4][52]. - The Chinese shipbuilding market continues to gain global market share, with high-value-added ship types increasing their proportion [3][42]. Summary by Sections 1. Company Overview - China Shipbuilding Industry Company is a leading ship design and manufacturing company, established in 2008 and listed in 2009. It has expanded its business through acquisitions and partnerships [11][22]. 2. Market Dynamics - The global shipbuilding market is experiencing a recovery, driven by increased demand for new ships as older vessels are retired. The report highlights the impact of geopolitical events on shipping rates and order placements [25][29]. - As of January 2024, new ship price indices for bulk carriers, oil tankers, and container ships have increased by 5.6%, 7.7%, and 3.5% year-on-year, respectively [3][37]. 3. Financial Performance - The company is projected to achieve revenues of 44.15 billion yuan in 2023, with a growth rate of 15.74%. The net profit for 2023 is expected to be between -0.88 billion and -0.74 billion yuan [4][55]. - The report forecasts a significant turnaround in profitability, with net profits expected to reach 2.74 billion yuan in 2024 and 4.99 billion yuan in 2025 [4][55]. 4. Business Segments - The company operates in various segments, including marine defense, marine transportation, deep-sea equipment, and ship repair. The marine transportation segment accounted for 28.5% of revenue in the first half of 2023 [16][18]. - The report notes that the company is focusing on high-end ship types, such as LNG carriers and FPSOs, which are increasingly in demand [13][44]. 5. Market Share and Competitive Position - China Shipbuilding has maintained its position as the world's leading shipbuilding nation, with a market share exceeding 50% in completed shipbuilding and new orders [3][42]. - The report emphasizes the company's ability to capture opportunities in the green shipbuilding sector, with a significant increase in orders for LNG and methanol-powered vessels [44][45].