Zheshang Securities released a research report stating that by 2025, new ship orders are shifting towards large-scale, high-end, and dual-fuel directions, with top shipyards leading in the construction of large ships with advanced technology, ensuring strong competitiveness in future high-quality and high-priced orders; Environmental policies are driving ship replacement cycles ahead of schedule, dual-fuel ship types are increasing the value per ship, and the peak of this cycle may accelerate due to environmental demand; 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 a clear "Matthew effect," where shipyards with high production capacity and high technological levels are expected to benefit first.

In terms of demand: From January to October 2024, according to Clarkson's statistics, global shipbuilding industry's new orders increased by 30% year-on-year. Container ships increased by 102% year-on-year, tankers by 51%; bulk carriers decreased by 13%; LNG ships increased by 38% year-on-year; other ship types increased by 10% year-on-year.

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 and demand situation that may continue to drive up ship prices.

Regarding prices: As of November 8, 2024, Clarkson's new shipbuilding price index closed at 189.42 points, a 6.2% increase year-to-date, and a 51% increase since 2021, positioned at the historical peak 99th percentile.

Downstream capacity: Container ship capacity is expected to be sufficient in 2024-2025, but tankers remain in short supply, with significant demand and ordering space for future tankers and bulk carriers.

Trends: The growth rate of new orders may slow down; however, due to production expansion challenges, coupled with ship replacement cycles and environmental policies, ship prices are likely to continue to set new highs.

In addition, the group's ship total assembly asset integration kicks off, improving the competitive landscape, with expected efficiency improvement. The integration of ship total assembly assets is progressing, and the competitive landscape is expected to be optimized. It is expected that the total assembly asset integration under China Shipbuilding Corporation will further enhance internal coordination, enhance economies of scale, and strengthen lean management.

Key recommendations: Key recommended symbols 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), focusing on Guangdong Songfa Ceramics (603268.SH), CSSC Science & Technology (600072.SH).

Risk warning: Risks include lower-than-expected shipbuilding demand and fluctuating raw material prices.