FINANCE PRESS, Oct. 31 (Reporter Chen Mo) Last night, China Shipbuilding (600150.SH) released another unsatisfactory three-quarter report after putting forward a two-ship merger plan with market objections. Its net profit for the Q3 quarter plummeted by more than 50%, and the revenue growth rate also showed a quarterly decline. An agency source told the Financial Federation reporter that they were not satisfied with the Q3 performance.

According to iFind financial terminal data, by the end of October, a total of 14 institutions had predicted the 2024 annual performance of Chinese ships in the past six months, with an average value of 5.283 billion yuan. According to the three-quarter report, the company's net profit for the first three quarters was 2.271 billion yuan. According to the profit distribution of previous years, the results of the first three quarters form the main part of the annual results, which can basically establish the scale of annual results. Currently, there is still a gap of about 3 billion yuan in the annual performance expectations of China Shipping Distance Agency.

Specifically, China Shipping announced last night that the company achieved operating income of 56.169 billion yuan in the first three quarters, up 13.12% year on year; net profit of 2.271 billion yuan, down 11.35% year on year; among them, the third quarter achieved operating income of 20.152 billion yuan, up 5.35% year on year; and net profit to mother of 0.858 billion yuan, down 57.26% year on year.

Regarding the reason for the sharp decline in Q3 net profit, China Shipping stated in an announcement that during the same period last year, the company's wholly-owned subsidiary Waigaoqiao Shipbuilding and Disposal Offshore Platform generated a non-monetary asset exchange profit and loss of 1.987 billion yuan. Excluding the impact of this matter, net profit attributable to shareholders of listed companies increased 3918.42% year-on-year in Q3; net profit attributable to shareholders of listed companies increased 5530.70% year-on-year in the first three quarters. However, the company did not explain in detail the reasons for the sharp increase in performance after excluding the influencing factors mentioned above.

However, from a revenue perspective, Chinese ships are facing downward pressure on their growth rate. The year-on-year revenue growth rates for this year's first quarterly report, semi-annual report, and three-quarter report were 68.84%, 17.99%, and 13.12%, respectively. Compared with the same period last year, the year-on-year revenue growth rate for the semi-annual report and the third quarterly report also decreased by 10 to 15 percentage points. Furthermore, according to iFind financial terminal data, the agency's average forecast for China's ships' revenue growth rate in 2024 is 16.31%, and its three-quarter report growth rate has fallen below the expected value.

Looking at the shipping market, the Finance Association reporter learned that orders for new domestic ships owned by Jiangnan Shipbuilding, a subsidiary of China Shipbuilding, have been scheduled until 2028. Currently, Jiangnan Shipbuilding has plans to expand production capacity. It is expected that next year, the “turning over” of the dock will increase to 6-7 batches, and basically reach 8 batches from 2025 to 2026. The higher the frequency of shipyards “turning over”, means a further increase in the number of ships to be built later.

Meanwhile, people related to Jiangnan Shipbuilding also revealed to the Financial Federation reporter that ships delivered in the second half of this year can already be profitable. It is expected that the shipyard as a whole will remain profitable in 2025, and orders for new ships delivered starting in 2026 are high-priced orders.

However, the merger of the two ships has clearly made it more difficult for investors to predict the future, as all aspects of the listed company's assets, business, etc. will change. According to the three-quarter report shareholder list, active investment institutions mostly chose to reduce their positions: compared with before the restructuring and suspension of trading on September 2, by the end of September, among the top ten tradable shareholders of China Shipping, Northbound Capital (Hong Kong Central Clearing Co., Ltd.), the Civil-Military Integration Industry Investment Fund, and CITIC Securities-Changfeng Single Asset Management Plan had reduced their holdings by about 9.3 million shares, 0.65 million shares, and nearly 4.3 million shares, respectively.

Compared to the K-line chart, the above holdings reduction operation was completed within 8 trading days after the company announced a plan to resume trading on September 19. During that time, individual stocks generally rose due to a rebound in the general market, but the above institutions still chose net sales. For details on the merger plan of the two ships, see the Financial Federation's previous report and readers' comments: The North-South Shipping 100 billion merger case: the “120-day average price protection price” is 13.3% and 18.8% lower than before the suspension of trading, respectively

Just before and after the disclosure of the two-ship merger plan, China Shipping's stock price continuously broke out of three negative volume lines, which also showed the mainstream attitude of the market. Another notable detail is that from the end of June to September 2, apart from the possibility of “knowing later” northbound capital still increasing positions on Chinese ships, the Civil-Military Integration Industry Investment Fund and CITIC Securities-Changfeng Single Asset Management have taken the lead in reducing their holdings by 2.45 million shares and 36 million shares, respectively.