China's leading ship enterprises enjoy the dividend of share improvement and structural upgrading

4. Ship upsizing and new energy upgrade the industry entry threshold

The upsizing of ships and the design and construction of new energy ships raise the technical threshold of the industry, and the competitiveness of China's leading ship enterprises is strengthened. With the vigorous development of global economy and trade, the stimulation of economies of scale, the progress of shipbuilding materials and shipbuilding technology, the strong promotion of green shipping policies, and the promotion of shipping alliances, the trend of ship upsizing continues to evolve. The average tonnage of China's new ship orders has shown a significant growth trend since the end of the 20th century. The larger the ship, the higher the requirements on its own ship structural strength, hydrodynamic performance, ship stability, fuel consumption, environmental protection and other aspects of technical performance. Therefore, the leading enterprises have prominent competitive advantages over small and medium-sized ship enterprises with weak technical capabilities.

In addition, as IMO's global shipping greenhouse gas emission reduction strategy continues to advance, the demand for new energy vessels is increasing. Clarkson data show that in China's new shipbuilding orders in 2022, the proportion of alternative fuel vessels has reached about 54%. At the end of June 2023, shipping giant CMA CGM Shipping ordered 10 24,000 TEU LNG twin fuel tank ships in China's largest private shipping company Yangzijiang Shipping Industry, which is scheduled to be delivered in 2026; Maersk, another shipping giant, has ordered six new medium-sized methanol-dual fuel vessels at Yangzijiang. At present, the emergence and application of dual-fuel engines is considered to be one of the effective means to solve Marine air pollution, but the construction of dual-fuel ships requires advanced technology accumulation, patent certificates and supply chain support, which also accelerates China's small boat enterprises to withdraw from the market.

90% of the world's maritime traffic is driven by low-speed engines as a power, and in the early years, the development of China's low-speed machines lags behind, and the three international brands occupy the global market. Low-speed engines generally refer to reciprocating internal combustion engines with a speed of less than 300 RPM, which can be divided into low-speed diesel engines and low-speed dual-fuel engines according to the fuel. The low-speed machine has the advantages of high power, high thermal efficiency, flexible fuel, high reliability and easy maintenance, and is the main propulsion power of ocean-going ships. Due to the large investment in low-speed machine research and development, the need for global service capabilities, with a certain scale to produce benefits, so low-speed machine since the 1950s experienced a period of mergers, acquisitions and demise of the process, to the 1990s, there are only three low-speed machine brands: Man, Wartsila and Mitsubishi. Among them, MAN was formed by the merger of the low-speed machinery businesses of the former German MAN and Danish B&W, and Wartsila's low-speed machinery business was acquired from Sulzer of Switzerland. In the early stage, China mainly carried out production through the introduction of patented technology, the purchase of production licenses transferred from overseas brands and some foreign professional supporting industrial chains.

China acquired Wartsila to fill the gap in low-speed diesel engine technology, and became one of the three global low-speed machine brands after integration. In 2015, the former CSSC acquired Wartsila's low-speed machinery business to form Winterthur Gas & Diesel (WinGD). The joint venture company will have Wartsila's two-stroke engine technology, so that China has obtained the European hundred years of Marine low-speed diesel engine development accumulation of massive engineering test database and patent technology, leapfrog to enhance China's Marine low-speed diesel engine independent research and development capability, so that China from many years of Marine low-speed diesel engine patent introduction country jumped to patent ownership country and technology exporting country. In 2017, Mitsubishi Corporation's low-speed engine business was merged with Kobe Engine Corporation to form Japan Engine Corporation (J-ENG). At present, the three low-speed machine brands in the world are MAN ES (MAN renamed MAN Energy Solutions), WinGD and J-ENG. In addition to J-ENG's existing brand and own production, MAN ES and WinGD are only responsible for technical research and product design of low-speed machines, which are manufactured by authorized patent factories through licenses. Low-speed machine patent factories are mostly located in China, Japan, South Korea, in recent years, the share of low-speed machines manufactured in China has increased significantly, 22 years China's share reached nearly 30%, an increase of 6.4pct from 19 years. Among Chinese enterprises, Hudong Heavy Machinery Co., LTD., a subsidiary of China Shipbuilding Group Co., Ltd. occupies more than 20% of the market share of low-speed machinery manufacturing, ranking second in the world, second only to Hyundai.