Soochow: New ship prices index remains high, merger of North and South Shipyards enters final stage.

Soochow released a research report stating that the new ship price index at the end of August was 186.3, down 1.6% year-on-year, a decrease of 1.6% compared to the beginning of the year, and a decrease of 0.2% compared to July. With orders from top shipyards extending to 2028, global ship prices remain high due to supply constraints. On August 13th, China CSSC (600150.SH) and China Shipbuilding Industry announced that they would implement their cash choice rights for dissenting shareholders of China Shipbuilding Industry. China Shipbuilding Industry's stock has been continuously suspended since August 13th, signaling the final stage of the merger between the north and south shipyards. Optimistic about the upturn in the market cycle, the industry competition landscape is expected to improve following the restructuring of the north and south shipyards, with enhanced synergies and improved operating quality. Key points from Soochow include: The new ship index at the end of August was down 1.6% year-on-year, with supply constraints supporting high ship prices. According to Clarksons, in August 2025, the new ship orders in the shipping industry totaled 4.22 million deadweight tons, down 77.5% year-on-year and 57.9% month-on-month. From January to August, the cumulative new ship orders in the industry totaled 66.92 million deadweight tons, down 52.8% year-on-year. Despite a decline in new ship orders due to a high base, the impact of the US Section 301 investigation, and the Shipping Act, the total investment remains significant, exceeding the average level of the past 10 years by 27.2%. By ship type, the new orders in August for bulk carriers/oil tankers/container ships/gas carriers were 1.7/10.3/20.1/6.8 million deadweight tons, with cumulative orders from January to August of 14.75/15.51/30.60/1.74 million deadweight tons, down by -67.4%/-67.5%/+0.3%/-74.8% year-on-year, with continued support for container ship orders. By the end of August 2025, the new ship price index was 186.3, down 1.6% year-on-year and 1.6% from the beginning of the year, with a 0.2% decrease compared to July. By ship type, the price indices for bulk carriers/oil tankers/container ships/gas carriers were 168.7/212.5/116.4/200.7, down by -2.5%/-4.7%/-1.9%/-2.5% from the beginning of the year, with a month-on-month change of +0.0%/-0.2%/+0.3%/-0.2%. With orders from top shipyards extending to 2028, global ship prices are maintained at a high level due to supply constraints. In the medium-term, the current peak of the shipping cycle has passed but not ended: cautious expansion of shipyard capacity on the supply side supports prices, and the trend of ship environmental transformation and lifespan renewal on the demand side is determined. As the pessimism and wait-and-see attitude brought by the US Shipping Act are eliminated, the order growth rate is expected to recover. China's shipbuilding industry chain advantage is difficult to replace, market position is stable. By the end of August 2025, global shipyards had orders of 397 million deadweight tons, a year-on-year increase of 11.7%, maintaining a high level, with a backlog coverage of 4.5 years and shipyard capacity still in short supply. Chinese shipyards had orders of 271 million deadweight tons, accounting for 68.3% of the global share, maintaining a leading position. From January to August 2025, shipyards in China, Japan, and South Korea signed new orders for 42.3/46/16.54 million deadweight tons, down by -61.2%/-57.0%/-6.6% year-on-year respectively. The market share of Chinese shipyards was approximately 63.2%, down 13.7% year-on-year due to the impact of the US Section 301 investigation and the Shipping Act. Modern shipbuilding is a capital, technology, and labor-intensive industry, and China's comparative advantages in industry chain completeness, raw material cost, and exchange rate are difficult to surpass. The impact of the Section 301 investigation and the Shipping Act on China's shipbuilding industry's global market position is limited, and the market share is expected to remain above 50%, continuing to benefit from the sustained prosperity. China CSSC continues to cash in on high-margin orders, and the merger of the north and south shipyards enhances comprehensive strength. In the first half of 2025, China CSSC achieved revenue of 40.3 billion yuan, a year-on-year increase of 12%, with net profit attributable to the parent company of 2.9 billion yuan, a year-on-year increase of 109%. As of June 2025, the company's civilian ship orders amounted to 26.49 million deadweight tons/233.5 billion yuan, up by 12%/17% year-on-year, with sufficient growth momentum. On August 13, 2025, China CSSC and China Shipbuilding Industry announced that they would implement their cash choice rights for dissenting shareholders of China Shipbuilding Industry. China Shipbuilding Industry's stock has been continuously suspended since August 13th, marking the final stage of the merger between the north and south shipyards. China CSSC is set to become the largest listed shipbuilding enterprise globally. Optimistic about the upturn in the market cycle, the industry competition landscape is expected to improve following the restructuring of the north and south shipyards, with enhanced synergies and improved operating quality. Focus on China CSSC, the ship assembly platform of China Shipbuilding Group, and pay attention to the core target China Shipbuilding Industry Group Power. **Risk warning** Risk of fluctuating material prices, exchange rate fluctuations, intensified industry competition, etc.