Shipbuilding industry leading enterprises, through the cycle ushered in the dawn

In terms of Marine engineering, during the four years from 2015 to 2018, the global Marine engineering market was in a long-term trough, product delivery was difficult, and some product orders were canceled, during which the gross profit margin of the company's Marine engineering was hovering around 0. In this regard, the company actively promoted the "destocking" of offshore equipment by transferring orders, participating in investment and establishing partnerships, and achieved initial results in 2019 after four years of pain, and 10.33% in 2020.

In recent years, the proportion of expenses in revenue has stabilized and the net inflow of operating cash flow has been maintained. Then, after the company implemented market-oriented debt-to-equity swaps, disposed of inefficient assets, and further scientifically optimized the management system, the proportion of company expenses during the period gradually returned to normal levels.

In recent years, the company's net operating cash flow has continued to be a net inflow state, and monetary funds are also relatively sufficient, especially after the realization of asset restructuring in 2020, the financial strength has been further enhanced.

Second, the ship market through the cycle, the total structure of the opportunity

(1) Introduction to the industrial chain of ship construction industry

Shipbuilding industry chain can be divided into upper, middle and lower reaches.

As the upstream of the industrial chain, ship design determines the technical specifications and major indicators of the ship, and is the core link of the entire industrial chain, with high technical barriers. At present, most high-level ship design institutions are concentrated in Europe, Japan and South Korea, Such as Norway's Ulstein Group (Ulstein Group), Finland's WartsilaGroup (WartsilaGroup), Japan's Kitada Shipping Design Company (Kitada Shipping Design Company), South Korea's Geo Shipbuilding and Marine Technology Co., LTD. (Geo Shipbuilding & Marine Technology Co., LTD. At present, Chinese ships have strong design capabilities in specific ship types. For example, Jiangnan Shipbuilding is the only ship enterprise in China with a full range of liquefied gas vessels, research and development, design and construction capabilities, and Waigaoqiao Shipbuilding has a design company specializing in the research and development and design of offshore products. At the same time, Chinese ships can rely on the design resources within CSSC, such as the 13 16000TEU container ship orders undertaken by Guangzhou Shipbuilding International in 2021 designed by China State Shipbuilding Group 708 Research Institute.

Ship manufacturing, like most transportation equipment manufacturing, is an extremely complex system engineering, in addition to raw materials such as steel, core manufacturers usually outsource specific production links to other manufacturers in a modular manner, thereby realizing the optimal allocation of resources on a global scale. These outsourced modules mainly include Marine power equipment (such as German MAN Diesel & Turbo Marine low-speed diesel engine, German MAK high-speed Marine diesel engine, etc.), Marine navigation equipment (such as British Decca radar, German Anschutz Compass, etc.) and deck machinery (such as Finland Cargotec, Finland). Aker Solutions (Norway), etc.

Marine low-speed diesel engine is the "heart" of the ship. From the introduction of foreign advanced technology, Hudong Heavy Machinery has gradually developed and optimized its own diesel engine series. After reorganization and integration, it can research and develop and manufacture Marine medium and low speed diesel engines, gas engines and dual fuel engines, etc., forming the whole industry chain capability of research and development, manufacturing, supporting and service.

The core manufacturers have assembled and formed each sub-module through three major processes, such as hull construction, ship outfitting and ship painting, and handed it over to the shipping company. The quality of this link largely depends on the manufacturer's production organization and some core shipbuilding technologies, such as precision control technology, regional painting technology and so on. The world's leading Shipbuilding companies include South Korea's Hyundai Heavy, South Korea's Samsung Heavy, Japan's Imabari Shipbuilding Co., Ltd and others.

The shipping company is responsible for the operation of the ship and decides when to dismantle the ship, taking into account factors such as the condition of the ship, the market and the market price of steel.

Shipbreaking industry is a labor-intensive industry, and the environmental pollution is large, in recent years with the development of China's economy, shipbreaking industry has gradually transferred to Bangladesh, India and other developing countries in Asia.

(2) The terminal shipping demand picks up, and the volume and price of new orders rise

Ship prices are also affected by the shipbuilding cycle, and their response to the macroeconomic environment is more timely and obvious. Especially after the global economic crisis in 2008, the price of various types of ships continued to decline sharply.