Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights that the shipbuilding profit elasticity continues to be validated, with a focus on the group's efforts to resolve remaining industry competition [1] - The company reported a significant increase in net profit for the first half of 2025, reaching 2.9 billion yuan, a year-on-year increase of 109% [6] - The merger with China Shipbuilding Industry Corporation has been approved by the China Securities Regulatory Commission and is in the implementation stage [6] Financial Data and Profit Forecast - Total revenue for 2025 is projected to be 81.617 billion yuan, with a year-on-year growth rate of 3.9% [5] - The net profit attributable to the parent company is expected to be 7.029 billion yuan in 2025, reflecting a year-on-year growth of 94.5% [5] - The earnings per share (EPS) for 2025 is estimated at 1.57 yuan, with a projected price-to-earnings (PE) ratio of 24 [5] - The gross profit margin is expected to improve to 15.5% in 2025, up from 12.2% in 2024 [5] Business Performance - The company achieved a revenue of 38.7 billion yuan from shipbuilding and marine engineering in the first half of 2025, with a gross margin of 11.7% [6] - The company has a backlog of 333 ships with a total weight of 26.49 million DWT, amounting to 233.5 billion yuan, which is an 8% increase compared to the end of 2024 [6] - The report notes a recovery in new ship prices and order volumes, indicating a potential release of pent-up demand in the shipbuilding market [6] Merger and Capacity - Post-merger, the combined capacity of the company and China Shipbuilding Industry Corporation is expected to reach 33% of global capacity in DWT terms and 18% in CGT terms [6] - The company is focused on resolving competition issues with its subsidiaries, with commitments to divest non-core assets within specified timeframes [6]