Core Viewpoint - The shipbuilding industry is experiencing a significant supply-demand gap, with a robust order backlog and expected growth in delivery volumes, indicating a positive outlook for the sector [1][3]. Group 1: Order Backlog and Delivery Expectations - As of the end of Q1 2025, global shipyards have a total order backlog of 381 million deadweight tons (DWT) / 162 million compensated gross tons (CGT), representing a 2% / 1% increase from the end of 2024 [1][3]. - The expected global ship delivery volume for 2025 is 97.28 million DWT / 44.63 million CGT, reflecting a year-on-year growth of 9% for both metrics [1][3]. - The order coverage ratio for global shipyards is projected to reach 3.8 years in 2024, marking a historical high, while the proportion of order capacity held is at a relatively low level of 12% [1][3]. Group 2: Financial Performance and Profitability - The shipbuilding sector is anticipated to achieve revenues of 210.3 billion yuan in 2024, a 12% year-on-year increase, driven by high industry demand and order fulfillment [2]. - Net profit attributable to shareholders is expected to reach 7.2 billion yuan, representing a substantial 103% increase year-on-year, supported by an improved delivery structure with a higher proportion of high-priced, low-cost orders [2]. - The ship price index remains elevated, with a slight decline of 1% to 187 at the end of Q1 2025, indicating stable pricing across various ship types [3]. Group 3: Market Dynamics and Future Outlook - The global new ship market saw a significant decline in new orders in Q1 2025, with a total of 19.8 million DWT / 8.95 million CGT, down 56% / 46% year-on-year, attributed to pre-emptive demand and market uncertainties [4]. - Despite the drop in new orders, the long delivery times (18-24 months) suggest that shipyards will still fulfill existing orders, potentially leading to a recovery in new ship demand starting in 2026 [4]. - The average age of the global fleet reached 13.1 years as of Q1 2025, with an expected increase in aging vessels driving replacement demand over the next decade [5]. Group 4: Investment Recommendations - The company recommends investing in China State Shipbuilding Corporation (CSSC) and paying attention to key players like China Power (600482.SH) and Songfa Co., Ltd. (603268.SH) for their quality shipbuilding assets [7].