China State Shipbuilding Corporation said first-half net profit likely soared by as much as 171 percent from a year earlier thanks to the introduction of lean management and rising orders for premium vessels such as auto and liquefied natural gas carriers.

Net profit is expected to have jumped 144 percent to 171 percent to between CNY1.35 billion and CNY1.5 billion (USD185.6 million and USD206.3 million) in the six months ended June 30, the shipbuilding giant said on Monday.

The Shanghai-based conglomerate attributed the earnings increase to new management practices that boosted efficiency and quality, a growing order book for higher-value vessels, the higher prices and quality of the civil ships it delivered, the better performance of affiliates, and a wider gross profit margin.

CSSC’s shares closed up 1.7 percent at CNY41.01 (USD5.64) in Shanghai on Tuesday, extending their gain so far this year to 39 percent.

In recent years, CSSC’s shipyards have been focusing more on mid- and premium products such as big LNG carriers, cruise ships, luxury roll-on/roll-off ships, and car transporters. High-end products accounted for 80 percent of its order book last year, with green vessels making up over 45 percent, executives said on its 2023 annual earnings conference call.

CSSC indicated that its order book is full, scheduled out to the end of 2027, with some extending into 2028, and the shipbuilder is gradually delivering and clearing out relatively low-value orders dating from before 2021.

Gross profit margin is expected to widen further because the share of orders for high-value vessels is growing, while the cost of steel plates is gradually steadying, the executives noted.

Source: Yicai Global