On August 9th, new ship prices recorded 188.61 points, up 0.28 points.

The China Shipbuilding Industry Association released its comments on the world's new shipbuilding market in the first half of 2024. The new shipbuilding market continues to surge ahead, and market indicators maintain a positive trend with a year-on-year increase in new orders and completions of more than 20%.

In terms of new orders, from January to June, the global new shipbuilding market saw a transaction volume of 29.2 million CGT, a year-on-year increase of 27.6%, and an increase of 49% compared to the average transaction volume in the same period of the past five years (2019-2023).

Among them, the transaction volume in June reached 7.18 million CGT, the highest monthly transaction volume since the beginning of this market recovery.

CITIC Securities research reports believe that the inevitable trend of the aging and new energy of the global shipping fleet will continue to drive the continuous expansion of ship replacement demand. Starting in 2024, the global new shipbuilding market will enter a "price and quantity rise" phase. The value and quantity of new ship orders will continue to grow, and it is predicted that the investment demand for new shipbuilding from 2024 to 2034 will be approximately 2.27 trillion U.S. dollars, with an average annual demand of 206.4 billion U.S. dollars for new ship orders, of which about 60% will be driven by fleet renewal demand.

It is estimated that there will be a sustained supply and demand gap in the new shipbuilding market from 2024 to 2032, and the shipbuilding industry's prosperity trend is clear. The current Clarksons new ship price index is 188 points. Judging from the historical review of the past three shipbuilding cycles, the high point of this cycle's Clarksons new ship price index will be between 240 and 250 points. At present, it is still in the middle of this cycle's prosperity upturn.

We continue to be bullish on this shipbuilding prosperity cycle and leading companies in the shipbuilding-related industry chain, and maintain an "outperform" rating.

Shipbuilding industry-related companies:

CSSC Offshore & Marine Engineering (00317): Huangpu Wenchong, a subsidiary of CSSC Offshore & Marine Engineering, was established in 1851 and is the main construction base for military ships, special engineering ships, and ocean construction in China. It is the largest and most powerful production base for China's dredging engineering ships and feeder container ships. The company is involved in four areas: ocean defense equipment, ocean transportation equipment, ocean development equipment, and ocean technology application equipment. As of the end of 2023, the company's order backlog contract total is approximately RMB 55.76 billion, of which the order backlog for shipbuilding contracts is RMB 53.73 billion, including 110 vessel products, 2 offshore equipment, a total of 3.4987 million deadweight tons. The abundant order backlog provides an important guarantee for the company's subsequent performance growth.