In 2021, the international shipping market recovered, the demand for container shipping was strong, the global new shipbuilding market was active, and the three indicators of Chinese shipbuilding enterprises ranked first in the world. Affected by the overall rise of raw material prices and the appreciation of RMB, the profit space of shipbuilding enterprises has been greatly reduced. However, the operating profit is affected by the price rise of raw materials, and the profit growth of ship supporting enterprises is significant. Anxin military industry analysts predict that the overall ship price of ship enterprises holding orders in 2022 will be higher than that in 2021. Without considering the changes of exchange rate and steel price, the profit margin of ship enterprises in 2022 is expected to be higher than that in 2021.
the comprehensive cost rises too fast and compresses the profit space
At the end of 2021, compared with the beginning of 2021, the main specifications of shipbuilding board, cable, paint and other marine materials increased by 14%, 20% and 50% respectively, and the marine main engine, crankshaft, propeller and other key marine supporting equipment generally increased by about 25%. According to the calculation of China Cssc Holdings Limited(600150) Industry Association, the exchange rate of RMB against the US dollar fluctuated both downward and upward throughout the year, with a slight appreciation of 2.3% and a cumulative appreciation of more than 8% in two years.
Under the double squeeze of the overall rise of raw material prices and the appreciation of RMB, the profit space of shipbuilding enterprises has been greatly reduced. The total profit of the whole year was only 1.66 billion yuan, a year-on-year decrease of 5.3%, and the profit margin of main revenue was only 0.6%.
The performance forecast of shipping enterprises also shows that the profit space is limited. The performance forecast of China Shipbuilding Industry Company Limited(601989) (601989. SH) on January 24 shows that the net profit in 2021 is expected to be 210-250 million yuan. Excluding the increase of land compensation received by its subsidiaries, the company’s asset disposal income in 2021 is 1.046 billion yuan. In fact, the profit is a loss.
the profit of ship supporting enterprises increased the fastest
According to the statistics of the shipbuilding industry association, from January to November 2021, there were 1093 Shipbuilding Enterprises above Designated Size in China, with a main business income of 425.22 billion yuan, a year-on-year increase of 9.6%. From January to November 2021, shipbuilding enterprises above Designated Size achieved a total profit of 7.35 billion yuan, a year-on-year increase of 56.4%. Among them, shipbuilding enterprises reached 1.66 billion yuan, a year-on-year decrease of 5.3%; Ship supporting enterprises reached 2.38 billion yuan, a year-on-year increase of 37.6%; Ship repair enterprises reached 1.27 billion yuan, a year-on-year decrease of 17.3%; Ship refitting enterprises reached 410 million yuan, a year-on-year decrease of 7.9%; Offshore equipment manufacturing enterprises achieved 1.45 billion yuan, turning losses into profits year-on-year.
shipbuilding board prices soared, and there is limited room for price decline in 2022
The sharp rise in iron ore prices has pushed up the price of shipbuilding board, and the soaring price has become the norm in the shipbuilding board market. In May 2021, the average price of 6mm shipbuilding board and 20mm shipbuilding board in China reached 7136 yuan / ton and 6636 yuan / ton respectively, a new high in recent 10 years. At the end of December, the average prices of 6mm shipbuilding board and 20mm shipbuilding board in China were 6010 yuan / ton and 5610 yuan / ton respectively, up 13.7% and 14.3% respectively over the beginning of the year. The China Cssc Holdings Limited(600150) Industry Association predicts that the demand for steel in the China Cssc Holdings Limited(600150) industry will maintain a stable growth in the next five years, exceeding 11 million tons in 2022, with a year-on-year growth rate of 12%.
The association predicts that in 2022, the proportion of newly started ships, medium and large container ships, automobile ships, chemical ships and liquefied gas ships will gradually increase, and the demand for crack arrest steel, invar steel, duplex stainless steel and high-strength steel will maintain a rapid growth. 2022-2023 is the peak year of shipbuilding steel, and the demand for various types of medium and thick sectors will remain high, Although the price of raw materials such as iron ore is expected to continue to fall, it is expected that there is limited room for the price decline of shipbuilding board in the whole year.
new ship orders increased by 131.8% year-on-year, and the three indicators ranked first in the world
In 2021, Chinese shipbuilding enterprises undertook 67.07 million dwt of new ships, with a year-on-year increase of 131.8%. Among them, they undertook 27.38 million dwt of all kinds of container ships, accounting for 60.9% of the world’s total; Orders for Dynagreen Environmental Protection Group Co.Ltd(601330) ships account for about 24.4% of China’s new ship orders. According to Clarkson’s statistics, among the global shipbuilding indicators in 2021 (calculated by DWT), China’s shipbuilding completion accounted for 48.4%, new orders accounted for 52.0%, and handheld orders accounted for 48.1%. All three indicators ranked first in the world. In 2021, China undertook 32.19 million DWT bulk carriers, accounting for 76.4% of the global total. The orders of container ships exceeded, with a total of 27.38 million dwt of container ships, accounting for 60.9% of the global total. Continue to make efforts in the high-end ship segment market, and undertake orders for chemical ships, automobile transport ships, marine auxiliary ships and multi-purpose ships, accounting for 72.7%, 76.6%, 647% and 63.3% of the global total by DWT respectively. Among the 18 major ship types in the world, China has 10 ship types, and the number of new orders ranks first in the world.
the number of new orders may decline to a certain extent in 2022, and the profit level will increase
According to the prediction of the shipbuilding industry association, in 2022, the uncertainty of the impact of covid-19 pneumonia on the world economy still exists, and the external environment is becoming more complex and severe. However, the confidence of the shipping and shipbuilding industry has been significantly boosted. In addition, the New International Maritime Environmental Protection Regulations are about to enter into force and the market opportunities brought by the demand for decarbonization, It is expected that the global demand for new ship ordering will not shrink significantly in 2022, and the trading volume will be about 90 million dwt. In 2022, China’s shipbuilding completion is expected to exceed 40 million dwt, and the number of new orders will decline to a certain extent.
The military industry analyst of Anxin securities told the financial associated press that the orders held by ship enterprises and completed orders in 2021 were mainly new ship orders from 2019 to 2020, and the overall ship price level was low. Affected by the rise of new ship prices in 2021, it is expected that the overall ship price of ship enterprises holding orders in 2022 will be higher than that in 2021, regardless of the changes of exchange rate and steel price, It is expected that the profit margin of ship enterprises in 2022 will be higher than that in 2021. It is suggested to pay attention to the ship supporting enterprises whose revenue continues to grow driven by the recovery of the shipbuilding industry and whose operating profit is relatively less affected by the rise in the price of raw materials, such as listed companies such as Asian Star Anchor Chain Co.Ltd.Jiangsu(601890) (601890. SH), China Shipbuilding Industry Group Power Co.Ltd(600482) (600482. Sh), China Marine Information Electronics Company Limited(600764) (600764. SH).
