Military Industry: The Military-Civilian Shipbuilding Sector is Welcoming a Dual Turning Point, and the Ship Equipment Industry is Worth Attention.
Release time:
2020-07-14
Source: Financial界 website
Anxin Securities: Feng Fuzhang
The military and civilian ship industry is facing a dual turning point: military ship orders are expected to see significant growth in 2019, while civilian ships are gradually warming up from a long-term cycle bottom. Compared to other military industries, the military-civilian integration level in the shipbuilding equipment industry is the deepest, with greater performance elasticity, making the shipbuilding equipment industry worth paying attention to.
Military ships: 1) In the short term, the Navy's military reform adjustments are nearing completion by the end of 2018, and Navy equipment orders are expected to see compensatory growth in 2019, with a high certainty of growth in military ship industry chain orders. 2) In the long term, China's ocean-going navy construction has a long way to go, with strong demand for ship equipment to fill gaps, and it will remain in a peak construction period for some time. Regarding Navy equipment prices: it is expected to decline due to audits and military product price reforms. Therefore, there is significant pressure on products with inflated costs and companies with weak price transfer capabilities, while the impact on market-oriented pricing and sufficiently competitive component products is relatively small.
Civilian ships: Under three major trends, the overall performance of civilian ship prosperity is showing an upward trend from the bottom, benefiting the performance reversal of leading civilian ship companies. 1) The civilian ship market is gradually warming up from a long-term cycle bottom, currently at the turning point of a mid-cycle recovery in shipbuilding; 2) The supply-side reform of civilian ships is continuously advancing, with shipbuilding capacity accelerating clearance, and new shipbuilding orders further concentrating on advantageous shipyards; 3) New shipbuilding prices are gradually rising, combined with the high-level decline in ship steel prices and the depreciation of the RMB, the profitability of shipyards is expected to improve. Overall, the profit turning point for leading civilian ship companies may have arrived.
Offshore engineering: Due to the large scale of offshore engineering orders held by global shipyards, the demand in the offshore engineering construction market remains sluggish; moreover, the delivery situation of offshore engineering equipment is still severe, and the offshore engineering orders on hand may become a significant burden for shipbuilding companies. Therefore, when investing in shipbuilding industry targets, it is essential to consider whether there is a risk of impairment losses on offshore engineering product assets.
Ship accessories: 1) Military products: The three major trends of "large-scale, stealth, and informatization" will lead to structural changes in the military ship accessory industry. For ship accessory manufacturers, it is crucial to pay attention to whether their technological direction aligns with the trends of ship informatization (including electrification and intelligence) and stealth development, as well as whether they have new product research and development reserves or equipment. 2) Civilian products: There is a clear trend of the global ship accessory industry shifting to China; the domestic ship accessory industry faces the "two low problems" of low domestic equipment installation rates and low industry concentration. Currently, it is at the bottom of the civilian ship cycle, causing small-scale and less competitive ship accessory manufacturers to face elimination. The concentration of the ship accessory industry is an inevitable trend, and based on this idea, targets with military product performance guarantees and the potential to vigorously expand the civilian product market can be selected.
Recommend News
Contact Information
Address: Room 1211, Building 3, No.80 Huashen Road, Waigaoqiao Free Trade Zone, Pudong New Area, Shanghai
Mobile:13917998260(General Manager Xu)
Mobile:18918048613(Manager Qin, Purchasing)
Mobile:18766261200(Manager Xiao, Technology)
Yi Wan Ship
Sweep to identify concerns:
Mobile version