China's Shipbuilding Giants Merge to CreateWorld's Largest Shipbuilding Company

July 15, 2025 — Themerger between China State Shipbuilding Corporation Limited (600150.SH) andChina Shipbuilding Heavy Industry Co., Ltd. (601989.SH) was approved by theShanghai Stock Exchange's Mergers and Acquisitions Review Committee on July 4,marking the birth of the world's largest shipbuilding company.

Significant Growth in Strength andImpressive First-Half Performance

The newly merged company will have totalassets exceeding 400 billion yuan, with orders booked through 2029 and a globalmarket share of over 15%. According to the half-year performance forecastsdisclosed by both companies on July 11, China State Shipbuilding CorporationLimited is expected to achieve a net profit of 2.8 to 3.1 billion yuan in thefirst half of the year, representing a year-on-year increase of 98.25% to119.49%. China Shipbuilding Heavy Industry Co., Ltd. is projected to report anet profit of 1.5 to 1.8 billion yuan during the same period, with ayear-on-year increase of 181.73% to 238.08%. Combined, the two companies areexpected to achieve a net profit of 4.3 to 4.9 billion yuan, a year-on-yearincrease of 121% to 152%, setting a new record for the same period in history.

Record-Breaking Transaction and SignificantSynergies in the Industry Chain

The merger involves a transaction amount of115.15 billion yuan, making it the largest absorption merger in the history ofA-shares. After the integration, high-quality assets from the North Ship, suchas Dalian Shipbuilding and Wuchang Shipbuilding, will be incorporated intoChina State Shipbuilding Corporation Limited, forming a full industry chainsynergy of "design - construction - supporting." According to DongwuSecurities, the capacity concentration in high-end fields such as LNG ships andultra-large container ships will be significantly enhanced after the merger,and the gross profit margin is expected to increase from the current 12% toover 15%.

Supporting the "Deep SeaTechnology" Strategy and Achieving Cost Reduction and EfficiencyImprovement

China Shipbuilding Group stated that thereorganization is an important measure to implement the national "Deep SeaTechnology" strategy, which will promote the interconnection of militaryand civilian technologies, unified scheduling of production capacity, andoptimization of supply chain collaboration. It is estimated that the annualcost of steel procurement will be reduced by about 800 million yuan, and theshipyard cycle will be shortened by 15%.

The successful implementation of thismerger marks a further enhancement of China's shipbuilding industry'scompetitiveness in the global market and injects strong momentum into China'smarine economy and national defense construction.