I. Domestic Shipbuilding Industry Integration Accelerates:CSSC Becomes World's Largest Listed Shipbuilder with 37% YoY Order Growth

Thehistoric merger between China State Shipbuilding Corporation (CSSC) and ChinaShipbuilding Industry Company (CSIC) was officially completed on August 5, creating a new entity with total assets exceeding RMB 400 billion, and the world's largest order backlog, becoming the global leader in both asset and order size.This merger, the first approved case since the revision of the "Measuresfor the Administration of Major Asset Restructuring of Listed Companies"in May 2025, took only 2 months from acceptance to registration, demonstratingstrong regulatory support for industrial integration. Post-merger, the newentity holds over 30% global market share, with high-value-added ordersincreasing from 35% to 88%, forming technological dominance particularly in LNGcarriers and ultra-large container ships.

Thedomestic order market is simultaneously booming. OnAugust 4, Haifeng Shipowner, a wholly-owned subsidiary of HaifengInternational, signed a contract with Huanghai Shipbuilding for 4 containerships, with   a maximum unit price of 152.7million, scheduled for delivery betweenDecember 2027 and July 2028. These vessels feature efficient propellers andlow-resistance hull design, improving propulsion efficiency by 13% compared totraditional designs and reducing annual fuel costs by approximately RMB380,000. Additionally, Wuhu Shipyard signed an order for multiple 45,000 DWTgeneral cargo ships with Poland's PZM, Europe's largest state-owned dry bulkshipping company, on August 1. The BLUETECH 45 design with 6% light load marginefficient propeller **improves fuel efficiency by 15% compared to similarvessels, with delivery expected in 2027.

Policy-drivennew energy ships have become growth drivers. Datafrom Yichang Shipbuilding Industrial Park shows 114 shipbuilding ordersreceived in 2025, including 100 new energy vessels (LNG, methanol, pureelectric, etc.), accounting for 87% and growing37% year-on-year. Zigui Huaxing Shipyard currently has 10 new energy shipsunder construction with 5 more in queue, reducing construction from 8 to 5months. Policy-wise, the old ship scrapping subsidy (up to RMB 3,200/GT)introduced in July 2024 continues to drive growth, with companies like HubeiDongchuan Heavy Industry having new energy cargo ship orders extending to 2027.

II. Intensifying International Market Competition: JapanSecures First Major Warship Export Order, South Korea Bets on AI Technology,Europe Accelerates Green Ship Deployment

MitsubishiHeavy Industries of Japan announced on August 5 that it has secured a contractto build 11 frigates for Australia, totaling 10billion Australian dollars (approximately $6.5 billion), marking Japan's firstexport of large-scale finished weapons since World War II. Based on theupgraded Mogami-class design, these frigates have a full load displacement of6,500 tons, equipped with 32-cell vertical launch systems (capable of carryingTomahawk cruise missiles). The first 3 ships will be built in Japan, with theremaining 8 to be assembled locally in Australia. This cooperation signifiesJapan's breakthrough in arms export restrictions, aiming to secure Australia'smilitary market through technology transfer and targeting 50% global market share in autonomous navigation ships by2030.

SouthKorea's HD Hyundai Group signed a four-party cooperation agreement with H-LineShipping on August 5 to jointly develop AI-basedautonomous and environmentally friendly ship technologies. The collaborationintegrates Avikus' autonomous navigation solution "HiNAS", HD HyundaiMarine Solution's route optimization system "Ocean Wise", and AIcargo handling system "AI-CHS", targeting12% reduction in fuel consumption and 45 tons/day decrease in carbon emissions.The South Korean government plans to invest 160 billion won (approximately $139million) in autonomous navigation technology R&D over 5 years, with Avikus'"HiNAS Control" system securing 170 orders, bringing the total numberof equipped ships to over 100.

Europecontinues to make strides in green shipping.Norway's Vard Shipyard received an order for two hybrid Service OperationVessels (SOVs) from UK's North Star on August 5. Based on the Vard 4 19platform, these vessels feature battery hybrid systems with methanol fuel conversion capability预留,scheduled for delivery in Q4 2027 for North Sea wind farm operations. Equippedwith motion-compensated gangways, they enable safe personnel transfer in seastate 4 conditions, reducing annual carbon emissions by 25% compared totraditional vessels. Additionally, CMA CGM placed an additional order for 12methanol dual-fuel container ships with China's Jiangnan Shipyard, atapproximately $265 million per vessel for delivery in 2028-2030, pushing global methanol-powered ship orderspast 300.

III. Intensive Technological Innovations: Carbon Capture,Air Lubrication, and Hydrogen Ships as Key Drivers for Green Transition

China'sDalian Shipbuilding Industry obtained a patent for "CO₂ MarineTransportation and Storage System" on August 1(Authorization No. CN116498890B). This modular system enables efficient CO₂transfer from ships to subsea storage sites with over 98% storage efficiency, expected to be applied in actualvessels by 2026. Meanwhile, Air Glide AI公开 a patent for "System forDelivering Air to Underwater Ship Surfaces" on August 2 (Publication No.CN120418150A), which forms an air lubrication layer beneath the hull throughunique nozzle design, reducing waterfriction resistance by up to 20%, saving 1.8 tons of fuel per ship annuallywith a 1-2 year investment payback period.

Hydrogenship technology has achieved breakthroughs. Theworld's first "bioethanol on-board reforming hydrogen production"ship "Daba·Alcohol Hydrogen Power No.1" successfully completed seatrials on the Lijiang River on July 17. Adopting "pure electric +alcohol-hydrogen range extender" mode, it generates hydrogen in real-timethrough Guangxi's innovative bioethanol reforming technology, emitting only water vapor with zero carbonemissions and extending range to 1,000 km. Developed jointly by WuhanUniversity of Technology and others, this technology has obtained 3 nationalpatents and is expected to commercialize in 2026.

SouthKorea accelerates in smart shipping. HD HyundaiHeavy Industries' "AI-CHS" cargo handling system optimizes containerstacking through machine learning, improvingloading efficiency by 30% and reducing cargo damage rate to 0.05%.Additionally, Samsung Heavy Industries delivered the world's firstsail-assisted Aframax tanker "BRANDSHATCH" on August 4, equipped withthree 40-meter-tall rigid wing sails, saving14.5 tons of fuel per day under ideal sea conditions and reducing carbonemissions by nearly 5,000 tons annually, providing a new path for tankerdecarbonization.

Global Shipbuilding Orders Overview (August 4-10, 2025)

Source:Clarksons Research, Company Announcements, International Ship Network