China’s Giant Invests $690 Million in Dry Docks as Tide Turns For Shipbuilding

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In the first half of 2024, Chinese shipbuilders received orders amounting to 54.22 million deadweight tons, a 43.9% increase from the previous year

China’s state-owned shipbuilding giant, China Shipbuilding Industry Co. Ltd. (601989.SH), is to invest more than 5 billion yuan ($690 million) in two acquisition deals to expand its shipyard capacity and meet rising demand.

China Shipbuilding Industry, the Shanghai-listed arm of China State Shipbuilding Corp. Ltd. (CSSC), announced Saturday a 4.04 billion yuan acquisition of Tianjin Xingang Shipbuilding Heavy Industry Co. Ltd.’s assets in Lingang, northern China's port city Tianjin.

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China Shipbuilding Industry is investing over 5 billion yuan ($690 million) to acquire shipyard assets to boost its capacity.
The acquisitions include a 4.04 billion-yuan purchase in Shanghai and a 1.04 billion-yuan shipyard acquisition in Wuhan.
Growing global demand has driven investment, with Chinese shipbuilders receiving 54.22 million deadweight tons of orders in H1 2024, up 43.9% from the previous year.

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Who’s Who

China Shipbuilding Industry Co. Ltd.: China Shipbuilding Industry Co. Ltd. (601989.SH) is investing over 5 billion yuan to expand its shipyard capacity through two acquisitions. It will buy Tianjin Xingang Shipbuilding’s assets for 4.04 billion yuan, increasing capacity by 2.4 million deadweight tons. Additionally, Wuchang Shipbuilding, a subsidiary, will acquire a Wuhan shipyard for 1.04 billion yuan. The company aims to meet rising global demand, with order books filled until 2028 and a projected significant profit increase for the first half of the year.

China State Shipbuilding Corp. Ltd.: China State Shipbuilding Corp. Ltd. (CSSC) is the core shipbuilding platform for China Shipbuilding Industry Co. Ltd. (601989.SH). It focuses primarily on shipbuilding and repair, which generate about 70% of its revenue. CSSC's main subsidiaries have filled order books extending to 2028, and the company is ramping up capacity to meet rising global demand, backed by robust production schedules and strong cash flow.

Wuchang Shipbuilding Industry Group Co. Ltd.: Wuchang Shipbuilding Industry Group Co. Ltd., a wholly owned unit of China Shipbuilding Industry, will invest 1.04 billion yuan to acquire a shipyard in Wuhan, Hubei province. This acquisition will significantly expand its land, factories, and production facilities, enhancing its capabilities in high-tech products and high-end sectional ship construction.

New Times Shipbuilding Co. Ltd.: New Times Shipbuilding Co. Ltd., China's second-largest privately owned shipbuilder, plans to invest nearly 5 billion yuan in building a new ultra-large dry dock. This marks its first capacity expansion since 2005 and is pending regulatory approval.

Yangzijiang Shipbuilding Holdings Ltd.: Yangzijiang Shipbuilding Holdings Ltd., China's largest private shipyard, plans to construct a new clean-energy-vessel manufacturing base with an annual production capacity of approximately 800,000 deadweight tons. The project is expected to be completed and operational by the end of 2026.

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What Happened When

2005：: New Times Shipbuilding Co. Ltd.’s last capacity expansion before its recent plan.

Early 2024：: There were 368 active shipyards worldwide, a 64% decrease from the 2008 peak of 1,031.

First half of 2024：: Chinese shipbuilders received orders amounting to 54.22 million deadweight tons, a 43.9% increase from the previous year.

First half of 2024：: China Shipbuilding Industry expects a net profit between 500 million and 580 million yuan.

End of June 2024：: Total order backlog reached 171.55 million deadweight tons, rising 38.6% year-on-year.

2024-07-27：: China Shipbuilding Industry announced a 4.04 billion yuan acquisition of Tianjin Xingang Shipbuilding Heavy Industry Co. Ltd.’s assets in Lingang New Area, Shanghai Free Trade Zone.

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