Chinese Shipbuilders：Read~Throughs from Yangzijiang Shipbuilding H124 results

Investment Rating - The investment rating for China CSSC Holdings is "Buy" with a price target of RMB 50.00 as of 12 August 2024 [10]. Core Insights - Yangzijiang Shipbuilding reported H124 results with a revenue growth of 15% year-over-year (YoY) and a gross profit margin (GPM) improvement of 8 percentage points YoY [1]. - The company achieved a strong order win of USD 8.5 billion in H124, which is 188% of its full-year goal for 2024, resulting in a total order book of USD 20 billion, equating to a duration of 4.6 years [1][2]. - The CEO indicated that while the upcycle for container shipbuilding may have peaked, there is an expectation for increased orders for energy shipping vessels, such as product tankers and LNG carriers [2]. - The shipbuilding margin is expected to remain stable, with Yangzijiang being the shipyard with the highest margins in the market, assuming no significant increases in steel prices or RMB appreciation [3]. Summary by Sections Financial Performance - Yangzijiang Shipbuilding's H124 revenue grew by 15% YoY and 2% quarter-over-quarter (QoQ) [1]. - The GPM improved by 8 percentage points YoY and 1 percentage point QoQ [1]. Order Book and Market Outlook - The total order book stands at USD 20 billion, with a duration of 4.6 years, indicating strong demand and longer delivery times accepted by shipowners [1]. - The CEO mentioned that the company would maintain flexibility for high-margin orders despite not revising the new order guidance [2]. Margin Stability - Yangzijiang Shipbuilding is expected to maintain elevated GPM levels, supported by a strong order backlog and competitive bidding for shipbuilding slots [3].