Global shipbuilding leader, benefit from the industry cycle recovery

In 2006, the controlling shares of Hudong Heavy Machinery were transferred to CSSC free of charge, laying the foundation for building the overall development system of modern ship industry chain. The essence of the free transfer of state-owned shares is the transfer of corporate control and management reorganization, and the free transfer of equity is generally led by the government and the competent departments of the industry. The transferee of state-owned shares must be a wholly state-owned company, and the change of equity has no loss to the holders of listed companies. In 2006, The State Council issued important documents such as the "Medium and long-term Development Plan for China's shipbuilding Industry", which clearly requires the annual output of diesel engines to reach 6 million horsepower in 2010 and 8 million horsepower in 2015. Hudong Heavy Machinery is the only Marine low-speed diesel engine manufacturing enterprise in CSSC, with a market share of more than 60%, which occupies an important position in the development strategy of CSSC and the national shipbuilding supporting industry. CSSC requires Hudong Heavy Machinery to produce 4.8 million horsepower of Marine diesel engines in 2015 and continue to maintain a 60% market share. In order to achieve this goal, we must not only get the full support of CSSC, but also make full use of the overall advantages of CSSC. In November 2006, the "state-owned shares" of Hudong Heavy Machinery held by Hudong Zhonghua Shipbuilding, the controlling shareholder of the company, and Shangcheng Xi, the second largest shareholder, were transferred to the actual controller China State Shipbuilding Corporation free of charge. After the completion of the equity transfer, China State Shipbuilding Corporation directly holds 53.27% of the shares of Hudong Heavy Machinery and becomes the controlling shareholder of the company. Through this equity transfer, CSSC can integrate various internal business structures more efficiently, further optimize ship supporting resources, and place HUDong Heavy Machinery more directly in the overall development system of CSSC to build a modern ship industry chain, and enhance Hudong Heavy Machinery's status in the entire CSSC Group.

1.2.2. Rising (2006-2012) : injected private ship assets and became a listing platform for the core civilian products of China Shipbuilding Industry Group

The cycle of the shipping industry continues to recover, and China's shipping enterprises have a good momentum of development. According to Clarkson data statistics, the global shipbuilding new orders reached a record high of 260 million DWT in 2007, of which the bulk carrier demand is the most strong, new orders reached a record high of 160 million DWT. Global hand-held orders reached an all-time high of 650 million DWT in October 2008. Ship prices also reached an all-time high in 2008, with the oil tanker price index reaching a peak of 255 and the bulk carrier price index reaching a peak of 240. In 2006, China's new orders exceeded South Korea for the first time, ranking first in the world, and gradually formed a three-way partnership with South Korea and Japan.

In 2007, after the injection of the Group's private ship assets, it was renamed China Ship and became the listing platform for the core civilian products of CSSC Group. In 2007, the company seized the historical opportunity of the great development of shipbuilding industry and the "double bull market" in the capital market, implemented asset restructuring through private equity offering, and acquired core civilian assets such as Waigaoqiao Shipbuilding, CSSC Chengxi and Yuanhang Wenchong under CSSC Group, and changed its name to "China State Shipbuilding Industry Corporation Limited". It has become a listing platform for the core civilian products of China State Shipbuilding Corporation, with a complete industrial chain of repair, manufacture and distribution. After the completion of the acquisition, the company's revenue and performance increased significantly, from 2007 to 2008, revenue and net profit continued to rise, in 2008, revenue reached 27.656 billion yuan, +54.71% year-on-year, net profit of 4.16 billion yuan hit a record high, the same ratio of +42.56%.

Waigaoqiao Shipbuilding and Chengxi Shipbuilding acquired by the company have strong strength in the field of ship building and repair. Waigaoqiao Shipbuilding is a leading enterprise in China's civil shipbuilding industry with strong technical force. In 2007, Waigaoqiao Shipbuilding has become the eighth largest shipbuilding enterprise in the world. The product line includes: large bulk carriers, container ships and large oil tankers. In 2006, the shipbuilding capacity was 3.2 million tons, and the shipbuilding tonnage accounted for more than 50% of CSSC, accounting for about 22% of the country. CSSC Chengxi is known as a "five-star" repair shipyard in the industry, especially in the repair and modification business of high-tech and high value-added special ships with a large market share. CSSC Chengxi and Yuanhang Wenchong repaired and modified 300 ships in 2006, with a dock capacity of 400,000 tons. After the completion of the Longxue Island ship repair base and Chengxi technological transformation, the dock capacity expanded to 1.07 million tons, ranking first in the country.