The global shipbuilding pattern is concentrated, and the benefits of China's leading ships are remarkable

China's capacity utilization monitoring index continued to improve, and the capacity utilization rate of the shipbuilding industry increased. According to the data of the China Shipbuilding Industry Association, the China Shipbuilding Capacity Utilization Monitoring Index (CCI) in 2022 reached 764 points, reaching the highest point in nearly 10 years, an increase of 22 points compared with 2021, an increase of 3%. It is expected that the CCI will continue to fluctuate in the normal range in 2023. According to Clarksons data show that in 2022, the global shipyard capacity of 30.6 million CGT, of which the Chinese shipyard capacity of 7.8 million GCT, accounting for 47% of the global proportion, capacity utilization is expected to rise further.

At present, the performance of key shipbuilding enterprises in China has shown a bottom rebound trend. According to the statistics of the China Shipbuilding Industry Association, from January to November 2022, 1,093 shipbuilding industry enterprises above designated size in the country achieved 457.29 billion yuan in main business income, an increase of 8.0%. The total profit of shipbuilding industry enterprises above designated size reached 13.65 billion yuan, an increase of 70.0%, and the efficiency of shipping enterprises continued to improve.

China's leading manufacturers have significantly improved their competitiveness. According to the data of Clarksons, as of 1M23, China State Shipbuilding Group has a total of 19 shipyards, with 539 ships in hand, with a total of 44.475 million deadweight tons, ranking first; Yangzijiang Shipbuilding Group, which has four shipyards and orders 151 ships with a total of 12.848 million deadweight tons, ranks sixth and is the largest private shipbuilder in China. China's backbone ship enterprises maintain strong international competitiveness, respectively, six enterprises entered the world's shipbuilding completion volume, new orders and hand-held orders in the top 10.

Chinese shipyards continue to break through high-value ships, and the quality of new ship orders continues to improve. According to the statistics of China Shipbuilding Industry Association, in 2022, China has 12 new orders of 18 major ship types in the world, ranking first in the world, among which new orders of bulk carriers, container ships, car carriers and crude oil carriers account for 74.3%, 56.8%, 88.7% and 66.1% of the global total respectively. China has continued to make breakthroughs in the field of large LNG carriers, and the international market share of new orders for large LNG carriers in 2022 has exceeded 30% for the first time. In 2022, China has formed a number of large-scale LNG carrier construction enterprise clusters, mainly Hudong Zhonghua, Big Ship Heavy Industry, Jiangnan Shipbuilding, China Merchants Haimen and Jiangsu Yangzijiang Shipping Industry. In the following 3-4 years, China's shipping enterprises are expected to usher in the peak period of shipping, and the proportion of high-tech ships is expected to increase significantly. According to shipbuilding industry statistics, 2023-2024 is the centralized delivery period of large container ships, as planned, China will deliver 44 large container ships of 15,000TEU and above, accounting for more than 20% of the shipbuilding completed in the year. 2025-2026 is the centralized delivery period of large LNG carriers, and many companies are constructing large LNG carriers for the first time.

2. The concentration of the head of the domestic market is obvious, and China's shipbuilding looks at Chinese ships

From the perspective of domestic competition pattern, the concentration of the head of China's shipbuilding industry is obvious. According to the statistics of the China Shipbuilding Industry Association, in 2022, the concentration of the top 10 enterprises in the country's shipbuilding completion volume is 64.9%, the concentration of the top 10 enterprises in the number of new orders is 63.6%, and the concentration of the top 10 enterprises in the number of hand-held orders is 65.8%. In 2022, six shipbuilding companies in China will enter the top 10 in terms of global shipbuilding completions, new orders signed and hand-held orders.

Under the logic of concentration enhancement, the head shipbuilding listed company is expected to be the first to benefit. Since the downturn of the shipbuilding industry cycle, large shipbuilding enterprises will choose to merge shipyards to further integrate to enhance their competitiveness, and long-term investment and corporate profitability continue to decline, forcing leading companies to concentrate market share. By comparing the company, CSSC and China Heavy Industry, it can be found that the overall performance of the shipbuilding industry is affected by the cyclical fluctuations of the industry. As a domestic core shipbuilding listed company, the company has excellent overall profitability.

The company has a global market share of about 10% and a market share of about 20% in China, leading the development of the shipbuilding industry. According to the statistics of the China Shipbuilding Industry Association, among the top ten shipbuilding completed in 2022, the company's subsidiaries Waigaoqiao Shipbuilding, Jiangnan Shipbuilding and Guangzhou Shipbuilding International are listed; Among the top ten new orders, Jiangnan Shipbuilding, a subsidiary of the company, made the list. According to the company announcement, in 2021, the company undertook orders for 132 ships / 12.117 million deadweight tons, and the tonnage completed 164.37% of the annual plan. As of 1H22, the company held a total of 239 civil ship shipbuilding orders / 20.7547 million DWT, accounting for 20.2% of China's weight, accounting for 9.7% of the global proportion.