Core Viewpoint - The report from Shenwan Hongyuan indicates that by the end of 2024, second-hand ship prices and new ship prices will peak and then decline, with second-hand ship prices stabilizing and surpassing their previous highs by 2025. [1][3] Group 1: Market Trends - By September 2025, the second-hand ship price index is expected to cross above the new ship price index, which historically has occurred four times since 2000, with three instances leading to supercycle markets. [1][3] - The shipping sector's improved sentiment is gradually transmitting to the upstream shipbuilding industry, as seen in past trends where shipbuilding stocks lagged behind the shipping market by about four months. [1][2] Group 2: Oil Tanker Market - The oil tanker charter rates are rising, indicating an increase in oil shipping market sentiment, which is expected to accelerate the transmission of this sentiment to the shipbuilding sector. [4] - The oil shipping market is anticipated to face a wave of old ships being retired, which could stimulate a recovery in the shipbuilding market, presenting opportunities for shipbuilding companies. [4] Group 3: Price Movements - The new ship price index saw a weekly increase of 0.03% to 184.86 points, primarily driven by a 0.15% rise in new oil tanker prices, reflecting the upward transmission of oil shipping market sentiment to shipbuilding. [5] - The second-hand ship price is expected to stabilize and exceed the previous high before the 2024 decline, indicating a potential shift in market dynamics. [3] Group 4: Valuation - Shipbuilding companies such as China Shipbuilding (600150.SH) and China Ship Defense (00317) are currently undervalued, with their order book amounts at approximately 56 billion and 7 billion USD, respectively, and market capitalization to order ratio at historical lows. [6]