HK Stock Market Move | Cssc Offshore & Marine Engineering (00317) rose by more than 3%, institutions believe that the company is expected to benefit from the long-term development of the domestic industry, and profits are expected to enter a period of explosive growth.

Cssc Offshore & Marine Engineering (00317) is up more than 3%, reaching an increase of 3.31% to HK$9.68 as of the time of writing, with a trading volume of HK$59.8709 million. Citi released a research report stating that Cssc Offshore & Marine Engineering is one of the leading companies in the Chinese shipbuilding industry. Due to the cyclical nature of the shipbuilding industry, rising costs of new ship construction, and benefiting from its technological advantages and a sufficient order backlog of 60 billion RMB, its profitability is expected to enter a period of explosive growth. The bank predicts that Cssc Offshore & Marine Engineering will achieve net profits of 800 million RMB in 2025 and 1.15 billion RMB in 2026. As China continues to expand its market share in new shipbuilding and improve its high-end manufacturing capabilities, Cssc Offshore & Marine Engineering will also benefit in the long term. Citi notes that, based on the 2001-2010 cycle, a forward P/B ratio of 1.0x is considered an appropriate target price. Therefore, based on the forecasted average net asset value per share for 2025-2026, Citi gives Cssc Offshore & Marine Engineering a target price of HK$14.00, representing a potential upside of around 53% from the current stock price. Since the restructuring of the parent company and other issues, the stock price has seen a significant pullback since 4Q24. Citi believes that the company's fundamentals remain strong and expects that as its profitability improves, negative sentiment will gradually dissipate, leading to a recovery in the stock price.