On the evening of October 28, China CSSC Corporation Limited (CSSC; 600150.SH) delivered its first quarterly report following the merger with China Shipbuilding Industry Corporation (CSIC): In the first nine months, it achieved operating revenue and net profit attributable to shareholders of the parent company of 107.403 billion yuan and 5.852 billion yuan, representing year-on-year increases of 17.96% and 115.41%, respectively. Over the past five years, CSSC’s performance has charted a V-shaped curve, showing greater resilience especially after the merger with CSIC. Concurrently, positive news came from several of its shipyards: Hudong-Zhonghua Shipbuilding delivered four liquefied natural gas (LNG) carriers in a single month, and the construction period for the second domestically built large cruise ship at Waigaoqiao Shipbuilding was shortened by another two months. However, behind this industry feast, risks are still emerging.
First Report Card Post-Merger: Revenue Breaks One Trillion, Net Profit Doubles
According to the Third Quarter Report for 2025 disclosed by CSSC, the company achieved an operating revenue of 107.403 billion yuan in the first nine months, a year-on-year increase of 17.96%; net profit attributable to shareholders of the parent company was 5.852 billion yuan, a significant year-on-year increase of 115.41%; and net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 4.382 billion yuan, a year-on-year increase of 122.24%. In the third quarter alone, operating revenue was 34.763 billion yuan, net profit attributable to shareholders of the parent company was 2.074 billion yuan, and net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 1.491 billion yuan, representing year-on-year increases of 4.76%, 97.56%, and 92.82%, respectively. The Third Quarter Report pointed out that the company’s ideal performance was mainly attributable to the high global shipbuilding market and the continuous upgrading and optimization of the delivered order structure. This is the first financial report since CSIC was incorporated into CSSC’s consolidated scope. CSSC stated that with the successful completion of the merger and restructuring, it is expected to strengthen the competitive advantage and order-winning capability of its main ship types, injecting momentum for sustained performance growth.
In the first three quarters, while revenue growth maintained double digits, the improvement in CSSC’s profit quality was even more noticeable. Its gross profit margin increased by 1.94 percentage points year-on-year to 12.56%, primarily due to an increase in both the quantity and price of delivered commercial ships and effective control of construction costs. The period expense ratio decreased by 1.5 percentage points year-on-year to 6.2%, indicating initial results from lean management. Specifically, the sales, management, and R&D expense ratios decreased by 0.06, 1.23, and 0.9 percentage points respectively. The financial expense ratio saw a slight increase of 0.69 percentage points due to reduced exchange gains, but the absolute value remained negative, indicating that the company’s overall financing costs are controllable. CSSC stated that the decline in the expense ratio stems both from the compressed management scope post-merger and the synergistic effects brought by centralized procurement, unified R&D, and digital production scheduling. As the restructuring dividends are further released, there is still room for reduction in expenses in the future.
On September 11, 2025, China Securities Depository and Clearing Corporation Limited issued the “Securities Change Registration Statement,” marking the official completion of CSSC’s share swap absorption of CSIC, concluding the largest absorption merger transaction between listed companies in the history of the A-share market. CSSC had previously stated that this restructuring would resolve the issue of homogeneous competition in the final assembly business between CSSC and CSIC, integrate the scientific research and production systems and management systems, promote the specialized, systematic, and coordinated development of member units, implement the Three-Year Action Plan for Deepening Reform, and promote the maintenance and appreciation of state-owned assets.
Five-Year “V-Shaped” Curve: Profit Leap from 172 Million to 5.85 Billion
The impressive figures in the Third Quarter Report did not appear overnight. From 2021 to the first three quarters of 2025, CSSC’s profit curve has traced a steep upward trajectory (see Figure 1): Net profit jumped from less than 300 million yuan in 2021 to 5.852 billion yuan in the first three quarters of 2025, not only setting a new record for the same period historically but also surpassing the full-year 2024 profit level of 3.614 billion yuan three months ahead of schedule. This indicates the concentrated release of scale effects post-merger during the high ship price phase. Looking back at the interim years, the net profit in 2022 was only 172 million yuan, a year-on-year decrease of 19.34%, truly reflecting the cyclical trough. In 2023, benefiting from order rebounds and cost control, net profit soared to 2.957 billion yuan, a year-on-year increase of 1614.73%, laying the base for subsequent explosive growth. The growth rate slowed to 22.21% in 2024, but the absolute amount still increased steadily. By 2025, it re-entered a triple-digit growth channel, with profit elasticity continuously amplifying.
The revenue side also exhibited characteristics of a “V-shaped reversal and accelerated expansion” (see Figure 2). Operating revenue in 2022 was 59.485 billion yuan, a slight year-on-year decrease of 0.31%, corroborating the profit trough that year. Market recovery in 2023 drove revenue up by 25.81% year-on-year to 74.839 billion yuan, reversing the downward trend. The growth rate slowed to 5.01% in 2024, affected by rising costs and capital consumption related to the merger, but the overall profit level remained on an upward trend, with the absolute amount rising to 78.584 billion yuan. In the first three quarters of 2025, operating revenue reached 107.403 billion yuan, a further year-on-year increase of 17.96%, exceeding the full-year 2024 revenue by nearly 30% in just nine months. The accelerated order delivery pace and the increased proportion of high-value ship types were the main drivers, with the scale expansion speed significantly faster than the industry average.
Profitability indicators simultaneously corroborate the improvement in operational quality (see Figures 3 and 4). The net profit margin rose year by year from 0.39% in 2021 to 1.46% in 2022, jumped to 3.95% in 2023, further increased to 4.91% in 2024, and reached 7.3% in the first three quarters of 2025, nearly a sevenfold increase over five years, indicating a continuous thickening of the net profit content per unit of operating revenue. The gross profit margin also recovered from 10.6% in 2021, after experiencing a low of 7.6% in 2022, to 10.57% in 2023, slightly decreased to 10.2% in 2024, and then climbed significantly to 12.56% in the first three quarters of 2025, setting a new stage high. High-priced orders and cost reductions from centralized procurement jointly widened the gross profit space, while group cost reduction, efficiency enhancement, and improved management efficiency significantly strengthened profit resilience.
Although the shipbuilding industry involves heavy asset operations requiring substantial investment in infrastructure like docks and ports, CSSC’s asset-liability ratio has always remained within a controllable range (see Figure 5). It was 66.89% in 2021, rose to 69.63% in 2024, and then fell back to 63.88% in the first three quarters of 2025. Although this level is slightly higher compared to international peers, considering the company’s central state-owned enterprise background and prudent financial management, overall operational risk remains within a controllable range.
Overall, CSSC has emerged from the cyclical bottom of 2022. Leveraging order structure upgrades and restructuring synergies, it reached dual highs in both profit growth rate and profit quality in 2025. Although uncertainties remain regarding subsequent industry sentiment and variables such as raw materials and exchange rates, the base and risk resistance capabilities have significantly strengthened.
Joining Forces to Maintain the Top Spot: Synergistic Efforts in Shipbuilding, Design, and R&D
Building on the sustained volume growth since the start of the “14th Five-Year Plan,” China’s shipbuilding industry once again confirmed its global leading position in 2025 with three sets of hard numbers: orders, deliveries, and technical indicators. According to Clarksons data, as of the end of June 2025, China’s shipbuilding industry had secured 64.2% of global new ship orders, maintaining the world’s top market share for 16 consecutive years. The world’s top 30 shipbuilding groups collectively signed 433 new orders in the first half of the year, with Chinese shipyards occupying 5 spots among the top 10. Among them, CSSC ranked second with 72 ships, accounting for 16.63% (see Table 1). In terms of order backlog, CSSC leads globally with 821 ships and 30.829 million compensated gross tons (CGT), exceeding the sum of the second and third places (see Table 2). As the world’s largest shipbuilding group, CSSC possesses China’s largest shipbuilding and repair base and the most comprehensive R&D capability for ships and supporting products. Its subsidiaries, including Jiangnan Shipyard, Hudong-Zhonghua Shipbuilding, Waigaoqiao Shipbuilding, Guangzhou Shipyard International, CSSC Chengxi Shipyard, Dalian Shipbuilding, and Beihai Shipbuilding, reported combined revenues exceeding 300 billion yuan in 2024, with production schedules currently filled until 2029.
In line with the impressive order data, China State Shipbuilding Corporation’s (CSSC) delivery list is also filled with “world’s firsts” and “China’s first sets”: the world’s first self-propelled enclosed salmon farming vessel, China’s first ocean-class intelligent research vessel, and the world’s first Aframax product tanker with wind-assisted propulsion have been successively signed and delivered; a batch order for 9000TEU container ships settled via cross-border RMB settlement was successfully secured; the world’s first full-process ship-based carbon capture system completed its first ship-to-ship liquid carbon dioxide transfer operation… The concentrated appearance of these achievements within the same shipbuilding group not only demonstrates the acceleration of the group’s technological iteration but also indicates that its production organization has developed the characteristics of rhythmization, batch production, and high efficiency, laying the foundation for subsequent higher-density deliveries.
In this report card, the LNG carrier segment of Hudong-Zhonghua Shipbuilding undoubtedly has a standout performance. Large LNG carriers are known in the industry as “super freezer ships at sea,” featuring high technical barriers, high added value, and high reliability requirements, and were long dominated by a few Japanese and Korean shipyards. Through continuous iteration over five generations of ship designs, CSSC has achieved a leap from following to running alongside and then to leading the pack: in 2024, it secured all 24 contracts for the 271,000 cubic meter LNG carriers under Qatar’s “Hundred-Ship Plan,” increasing its international market share from 8% to around 20%; in October 2025, it delivered four fifth-generation 174,000 cubic meter LNG carriers in a single month, setting a record for monthly deliveries by a Chinese shipbuilder, with a full-year target of 11 deliveries, set to break the annual record again. A relevant person in charge at Hudong-Zhonghua Shipbuilding stated that the doubling of both production capacity and order volume benefits from the meticulous refinement of several generations of ship designs and the simultaneous strengthening of the domestic supply chain system – the number of domestic LNG carrier suppliers has expanded to over 130, forming a supporting market with an output value of hundreds of billions of yuan, driving the localization rate of large LNG carrier supporting equipment to exceed 80%, and simultaneously enhancing the safety and cost advantages of the industrial chain.
The rapid expansion of demand for green ships provides higher premium space for technologically leading players. Clarksons data shows that in June 2025, China’s newly received green ship orders accounted for 68.8% of the international market share, with a shipbuilding industry profit margin of 9.71%, hitting a 10-year high; the proportion of green ship orders received by Hudong-Zhonghua Shipbuilding this year has exceeded 80%, covering ship types such as container ships, LNG carriers, and multi-fuel solutions including methanol and liquid hydrogen. Wang Jiaying, Assistant General Manager and Head of Marketing at Hudong-Zhonghua Shipbuilding, said: “In response to the current changes in the market situation, we will further optimize, build smart green factories, reduce ineffective man-hour losses, and make our entire production smoother and more efficient. We will increase investment in ship R&D and design, develop new green and intelligent ship types, and subsequently gradually reach world-advanced levels, further leading the market.”
Incremental news also comes from the design end. The Shanghai Merchant Ship Design & Research Institute (SDARI) under CSSC accounted for 22.5% of global new ship design orders in 2024, and signed 254 new design orders in the first three quarters of 2025, a 10-year high, covering the full spectrum of ship types including bulk carriers, container ships, ore carriers, and car carriers. The early surge in design orders means that there is still a sufficient pipeline of high-value-added orders queuing up for the assembly end over the next three years, and it also provides a decision-making window for CSSC to lock in technology routes in advance and optimize ship design platforms. SDARI’s comprehensive coverage capability in niche ship types such as alternative fuels, coastal feeder lines, and international trunk lines provides a solid technical foundation for the “domestic ships built domestically, domestic cargo transported domestically” strategy, while simultaneously enhancing its appeal as a one-stop solution for overseas shipowners.
The efficient realization of production capacity is inseparable from base-level coordination. In the No. 2 dock of Waigaoqiao Shipbuilding, the second domestically built large cruise ship, “Ada·Huacheng,” has entered the outfitting stage, with the overall construction period shortened by over two months compared to the first ship; as the only enterprise in the world capable of simultaneously building civilian ships, offshore equipment, and large cruise ships, Waigaoqiao Shipbuilding has made the parallel construction of multiple complex ship types a norm through rhythmized construction and digitalized supply chains, setting a new benchmark for batch production and high efficiency in China’s shipbuilding industry. The breakthrough in the cruise ship sector not only fills a domestic gap but also signifies that CSSC is qualified to enter the global supply chain for large luxury cruise ships, with the potential to share in the nearly ten-billion-dollar annual global market for cruise ship refits and new builds in the future.
The multiplier effect of industrial chain integration quickly became apparent after the restructuring with China Shipbuilding Industry Corporation (CSIC). The former CSSC was strong in final assembly, while CSIC possessed a complete supporting system including Dalian Marine Propulsion and Wuhan Heavy Industry. The merger integrated the entire chain of “final assembly + supporting,” achieving unified scheduling for procurement, logistics, and R&D, improving supply chain efficiency while gaining about a 2% reduction in costs; technologically, the advantages of LNG carriers, large cruise ships, special ship types, and VLCCs, bulk carriers, and naval vessels complement each other, forming a product matrix covering the full spectrum, all fuels, and the entire lifecycle; in terms of capacity, the order intake and production scheduling of the seven major shipyards are commanded uniformly, avoiding internal competition and friction, and increasing capacity utilization by about 8 percentage points; in branding, the unified “China State Shipbuilding Corporation” logo enhances recognition among international shipowners, facilitating the export of Chinese standards along with the ship designs.
Subsequently, CSSC plans to invest over 8 billion yuan cumulatively from 2026 to 2028 for projects including the expansion of green power production lines, upgrades to intelligent cutting and welding equipment, and the construction of new LNG fuel tank workshops. The goal is to increase the proportion of green ship production capacity from 40% to 60% by 2028, while simultaneously incorporating block manufacturing, logistics and warehousing, and quality inspection into a real-time data closed loop through a 5G+ industrial internet platform, further reducing man-hours per ship and construction cycles. As the demand for green, intelligent, and large-scale ships continues to grow, CSSC, leveraging its triple advantages of order backlog, technological reserves, and industrial chain integration, is expected to further widen its leading gap in the new round of technological transformation in the global shipbuilding industry.
“Port Surcharge” Suspended for One Year: Risks of Raw Materials, Exchange Rates, and Policies Remain
While orders and technology are advancing rapidly, good news also came from China’s Ministry of Commerce at the end of October. The US side will suspend the “Section 301 investigation” measures targeting China’s maritime, logistics, and shipbuilding industries for one year, and China will simultaneously suspend countermeasures for one year.
Although the Section 301 “port surcharge” is suspended for one year, the three major risks of raw materials, exchange rates, and policies still loom overhead and could erode corporate profits at any time.
Industry insiders indicate that steel is the “food” of shipbuilding, with shipbuilding steel plates accounting for 25% to 30% of the cost of a single ship. A 6600TEU container ship uses about 25,000 tons of steel; for every 1000 yuan increase in the unit price of steel, the cost increases by 25 million yuan, putting gross margins under constant pressure of being squeezed. In terms of exchange rates, approximately 70% of CSSC’s order backlog is denominated in US dollars. Every fluctuation in the RMB to USD exchange rate causes exchange losses on the unhedged portion. If the pace of the US Federal Reserve’s interest rate /cuts and the trend of the US dollar deviate from expectations, it will directly impact the net profit margins of shipyards. Policy risks are becoming more complex. The International Maritime Organization’s (IMO) 2026 CII correction factor and the expansion of the EU’s carbon border tax may force shipyards to upgrade designs in advance, with potential additional retrofitting costs per ship reaching millions of dollars; the US has only suspended the Section 301 port fee for one year, and policy uncertainty will make overseas shipowners more cautious when placing orders at Chinese shipyards. The叠加 of the three variables of raw materials, exchange rates, and policies means that the recovery pace of the shipbuilding industry still faces significant uncertainty.
