China Shipbuilding & Repairing Industry Report, 2007-2008

SUMMARY

China's shipbuilding industry kept a fast growth in the first three quarters of 2007, and a variety of indicators refreshed the record. The accomplished output of shipbuilding industry amounted to 12.03 million DWT, a rise of 44 percent over the same period last year. Of all, the exported shipping hit 9.77 million DWT, taking 81 percent of accomplished shipbuilding output. In addition, new shipbuilding orders reached 64.34 million DWT, up 120 percent from a year earlier. Of all, the exported shipping arrived at 57.22 DWT, a share of 89 percent in the new shipbuilding orders. The handheld shipbuilding orders were up to 129.35 million DWT, up by 111 percent year-on-year. Of all, the exported shipping got to 113.07 million DWT, accounting for 87 percent of handheld shipbuilding orders.

The accomplished shipbuilding output, new shipbuilding orders and handheld shipbuilding orders of China takes a global market share of 20.1 percent, 38.7 percent and 29.5 percent respectively. Since the cost-efficient labor force in China's shipbuilding industry and a 17 percent of tax rebates on exports, the shipbuilding in China is quite competitive in the international market. In recent years, China-made shipping has a price cut of five percent to eight percent compared to the shipping built in South Korea. According to the forecast, the shipbuilding accomplished in China in the year of 2007 will be above 16 million DWT.

The exported value of China-made shipping reached USD 8.76 billion in the first three quarters of 2007, up 61.9 percent from a year earlier and exceeding the total exported value in 2006. The shipping products have been exported to 142 countries and regions, particularly to Singapore, Germany and Hong Kong (China). The shipping import reaches RMB 940 million, up 125.8 year-on-year, 63.9 percentage points higher than the shipping export.

The marine market becomes increasingly prosperous. To modify the ships is the fastest way for marine transport companies to expand the carrying capacity. Since 2007, the ship repairing enterprises continued to receive orders of ships modification business. The repairing work of ocean lines expands rapidly and the efficient of backbone enterprises to repair ships is significantly improved, which conduces to the dramatically growing production capacity of the shipping repairing industry. In Jan.-Aug. 2007, the output value of ship repairing reached RMB 30.3 billion, up 62 percent year-on-year. Moreover, the industrial added value was up to RMB 10 billion, up by 71 percent from a year earlier. The profit of the ship repairing industry hit RMB 3.9 billion, with a rise of 81 percent and a contribution ratio of 35.4 percent to total profits of the whole industry.

As is shown from the current market situation of global shipbuilding industry, the shipbuilding market will be more prosperous since the global economic trade keeps a rapid growth and the marine transport market grows fast. Driven by the strong demand of iron ore and coal, the global bulk cargo marine transport market advances triumphantly and the Baltic Dry Index (BDI) continuously refreshes the record. As the oil tanker market declines, the bulk cargo carrier market is greatly incentive to the further prosperity of the world's shipbuilding market. In addition, there is a rising prosper in the market of container transportation, the cargo volume in each marine line remains stable, and the period leasing level keeps rising steadily. The rising trend of market demand will greatly promote the steady growth of China's shipbuilding and repairing industry in the future.

TABLE OF CONTENTS

1. Macro-operation of China Shipbuilding and Repairing Industry in 2007Q3

• 1.1 Analysis of Industrial Policies
  • 1.1.1 Study on Latest Policies
  • 1.1.2 Provisions on the Management on Investments in Shipping Industry
  • 1.1.3 Urgent National Standards to Be Issued for Ship Repairing Industry
  • 1.1.4 Shipping Development in the 11th Five-Year Plan Period
• 1.2 Overview of Industrial Operation
  • 1.2.1 Analysis of Industrial Boom Index
  • 1.2.2 Basic Information on Economic Operation
  • 1.2.3 Main Characteristics of Economic Operation
  • 1.2.4 Main Problems in Economic Operation
  • 1.2.5 Ship Market Situation, Forecast and Suggestions

2. Operation of China's Shipbuilding and Repairing Industry in 2007Q3

• 2.1 Overall Performance of China's Shipping Industry
  • 2.1.1 Overall Benefit of China's Shipping Industry
  • 2.1.2 Shipping Enterprises in China
• 2.2 Operation Status of China's Shipping Industry
  • 2.2.1 Operation Scale of China's Shipping Industry
  • 2.2.2 Profitability of China's Shipping Industry
  • 2.2.3 Operating Capacity of China's Shipping Industry
  • 2.2.4 Debt-paying Ability of China's Shipping Industry
• 2.3 Operation Indices of Differently Sized Enterprises in China's Ship Repairing Industry, Jan.-Aug. 2007
  • 2.3.1 Per-capita Indices of Differently Sized Enterprises in China's Ship Repairing Industry
  • 2.3.2 Profitability of Differently Sized Enterprises
  • 2.3.3 Operating Capacity of Differently Sized Enterprises
  • 2.3.4 Solvency of Differently Sized Enterprises

3. Analysis on the Industry Chain

• 3.1 Industry Chain
• 3.2 Upstream and Downstream Analysis
  • 3.2.1 Concentration of Iron and Steel Industry
    • 3.2.1.1 Crude Steel
    • 3.2.1.2 Iron Ore
    • 3.2.1.3 Key Enterprises by Output
    • 3.2.1.4 Concentration Analysis
  • 3.2.2 Price Indices of Iron and Steel Market
    • 3.2.2.1 Steel Slabs Market
    • 3.2.2.2 Steel Pipes Market
  • 3.2.3 Demand of Steel for Shipping
    • 3.2.3.1 Demand of Steel Slabs for Shipbuilding
    • 3.2.3.2 Three Development Trends of Steel for Shipbuilding
  • 3.2.4 Throughout of Ports
    • 3.2.4.1 Accumulated Coal Transport of Main Ports in China
    • 3.2.4.2 Ports above Designated Sizes
    • 3.2.4.3 Container Throughput of Ports in China
    • 3.2.4.4 Container Throughput of Ports in China
    • 3.2.4.5 Container Throughput of Ports in China

4. In-depth Analysis of Industrial Operation

• 4.1 Key Shipbuilding Enterprises
  • 4.1.1 Global Development of Chinese Listed Shipbuilding Companies
• 4.2 Key Ship Repairing Enterprises
  • 4.2.1 COSCO Shipyard
  • 4.2.2 China Shipbuilding Industry Corporation
  • 4.2.3 Chengxi Shipyard Co., Ltd
• 4.3 Zhoushan Shipbuilding
  • 4.3.1 Four Highlights in Zhoushan Shipbuilding Industry
  • 4.3.2 Status Quo and Conceiving of Zhoushan Ship Repairing Service and Trade
  • 4.3.3 Shipping Mortgage Loan Business of Small Enterprises
  • 4.3.4 Investment of over RMB 9 billion - 60 Percent of Shipbuilding Industry

5. Target Markets of Shipbuilding and Repairing Industry

• 5.1 Risks in the Development of Shipping Industry
  • 5.1.1 Increasing International Trade Frictions
  • 5.1.2 Unreasonable Trade Structure
  • 5.1.3 Poor Anti-risk Capability
  • 5.1.4 Outdated Production Technologies of Ship Supporting Equipments
  • 5.1.5 Pressure from RMB Appreciation
  • 5.1.6 Credit Risks
• 5.2 Opportunities in Shipping Industry
  • 5.2.1 Investment Opportunities
  • 5.2.2 Opportunities and Challenges
• 5.3 Financing Environments
  • 5.3.1 Support of RMB 6.013 billion from Bank of China for Changhang Shipyard
  • 5.3.2 Yantai Shipyard and China Construction Bank
  • 5.3.3 Investments of Wenzhou Merchants Bank in Shipbuilding Industry
• 5.4 Financial Performance of Key Shipping Enterprises in China
  • 5.4.1 Large-size Enterprises
  • 5.4.2 Medium-size Enterprises
  • 5.4.3 Small-size Enterprises
• 5.5 Development Trend of China's Shipbuilding and Repairing Industry in 2008

List of Charts

• Main Economic Indicators of China's Shipping Industry, Jan.-Aug. 2007
• Comparison of Three Major Shipbuilding Indices, 2007Q3
• Forecast of Total Demand of Steel for Shipping in China, 2006-2015
• Dry Bulk Cargo Shipbuilding Price Trend, 2001-Jul. 2007
• Overall Profitability of China's Shipping Industry, Jan.-Aug. 2007
• Performance of Shipping Industry, Jan.-Aug. 2007
• Operation Scale of China's Shipping Industry by Reporting Period, Jan.-Aug. 2007
• Profitability of China's Shipping Industry, Jan.-Aug. 2007
• Operating Capacity of China's Shipping Industry, Jan.-Aug. 2007
• Debt-paying Ability of China's Shipping Industry, Jan.-Aug. 2007
• Comparison among Differently Sized Enterprises by Per-capital Index
• Comparison among Differently Sized Enterprises by Profitability
• Comparison among Differently Sized Enterprises by Operating Capacity
• Comparison among Differently Sized Enterprises by Debt-paying Ability
• Top Ten Enterprises by Crude Steel Output in China, Jan.-Aug. 2007
• Accumulated Coal Transport of Main Ports in China, Jan.-Jul. 2007
• Cargo Throughput of Ports by Types in China, Jan.-Jul. 2007
• Passenger Throughput of Ports by Types in China, Jan.-Jul. 2007
• Accomplished Foreign Trade Cargo Throughput of Ports above Designated Sizes, Jan.-Jul. 2007
• Statistics on Cargo Throughput of Ports, Jan.-Aug. 2007
• Ranking of Top Ten Ports by Container Throughput in China, Jan.-Aug. 2007
• Accumulated Foreign Trade Cargo Throughput of Ports above Designated Sizes in China, Jan.-Sep. 2007
• Ranking of Top Ten Ports by Container Throughput in China, Jan.-Sep. 2007
• Analysis on Financial Performance of Large Shipping Enterprises in China
• Financial Performance of Medium-sized Shipping Enterprises in China
• Analysis on Financial Performance of Small-sized Shipping Enterprises in China
• Main Economic Indicators of China's Shipping Industry, Jan.-Aug. 2007
• Growth for New Orders of Main Shipbuilding Enterprises
• Sketch Map for Overall Profitability of China's Shipping Industry
• Top Ten Provinces by the Number of Shipping Enterprises, Jan.-Aug. 2007
• Sketch Map for Profitability of China's Shipping Industry, Jan.-Aug. 2007
• Sketch Map for Operating Capacity of China's Shipping Industry, Jan.-Aug. 2007
• Sketch Map for the Debt-paying Ability of China's Shipping Industry
• Comparison among Differently Sized Enterprises by Per-capita Index
• Comparison among Differently Sized Enterprises by Profitability
• Comparison among Differently Sized Enterprises by Operating Capacity
• Comparison among Differently Sized Enterprises by Debt-paying Ability
• Sketch Map of Shipbuilding and Repairing Industry
• Trend of Steel Price Indices, Jan.-Sep. 2007
• Accumulated Coal Transport of Major Ports in China, Jan.-Jul. 2007
• Cargo Throughout of Ports by Types in China, Jan.-Jul. 2007
• Passenger Throughput of Ports by Types in China, Jan.-Jul. 2007
• Foreign Trade Cargo Throughput of Ports above Designated Sizes in China, Jan.-Jul. 2007
• Statistics of Cargo Throughput of Ports, Jan.-Aug. 2007
• Top Ten Ports by Container Throughput in China, Jan-Aug. 2007
• Foreign Trade Cargo Throughput of Ports above Designated Sizes in China, Jan.-Sep.2007
• Ranking of Top Ten Ports by Container Throughput in China, Jan-Sep. 2007