Zheshang: In the past 25 years, we have been paying attention to the development of new ship orders towards large-scale, high-end, and dual-fuel directions.

Zheshang released a research report stating that looking ahead to 2025, new ship orders will trend towards larger, higher-end, dual-fuel directions. Leading shipyards will have advanced technology in constructing large ships, and future high-quality high-priced orders will have strong competitiveness. Environmental policies will drive earlier ship replacement cycles, and dual-fuel ship types will increase the value of each ship. The peak of this cycle may accelerate due to environmental demands. The industry continues to concentrate in China, with Chinese new orders accounting for 74.7% of the global total in the first three quarters of 2024. China's shipbuilding market share continues to concentrate on leading enterprises, with the "Matthew Effect" being obvious. High-capacity, high-tech shipyards are expected to benefit first. In terms of demand: From January to October 2024, according to Clarkson statistics, global shipbuilding industry new orders increased by 30% year-on-year. Container ships increased by 102%, tankers by 51%, bulk carriers decreased by 13%, LNG carriers increased by 38%, and other types of vessels increased by 10%. In terms of supply: Shipyard capacity is nearly saturated, but the number of active shipyards and delivery volumes have significantly decreased, leading to a tight supply-demand situation or continuous increase in ship prices. In terms of prices: As of November 8, 2024, the Clarkson Newbuilding Price Index closed at 189.42 points, a 6.2% increase since the beginning of this year, and a 51% increase since 2021, placing it at the historical peak of the 99th percentile. Downstream capacity: Container ship capacity will be sufficient from 2024 to 2025, but tankers will still be in short supply, with significant demand and ordering space for subsequent tankers and bulk carriers. Trends: The growth rate of new orders may slow down, but due to difficulties in expanding production, coupled with the replacement cycle and environmental policies, ship prices are expected to continue hitting new highs. Furthermore, the integration of Group shipbuilding assets has begun, improving the competitive landscape, and efficiency improvement is expected from the integration of shipbuilding assets, optimizing the competitive landscape. The integration of shipbuilding assets under China Shipbuilding Group is expected to further enhance internal coordination, improve economies of scale, and strengthen lean management. Key recommendations: Key recommendations include China CSSC (600150.SH), China Shipbuilding Industry (601989.SH), China Shipbuilding Industry Group Power (600482.SH), China Marine Information Electronics (600764.SH), CSSC Offshore & Marine Engineering (600685.SH), Asian Star Anchor Chain (601890.SH). Keep an eye on Guangdong Songfa Ceramics (603268.SH), CSSC Science & Technology (600072.SH), among others. Risk warning: Risks include lower-than-expected shipbuilding demand and fluctuating raw material prices.