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| Published：2021.04.10 News Sources：Qingdao Gute Ship Supplies Co., Ltd. Views： | |||
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Annual profit of $2.6 billion! Yangtze River shipping industry "epidemic" ahead
In 2020, the net profit will be 2.6 billion yuan and the gross profit of shipbuilding business will be 2.1 billion yuan On April 5, Yangzijiang Shipbuilding Group released its 2020 annual financial report and related documents. In 2020, the global spread of COVID-19 will pose great uncertainties to the world economy. Through various measures, Yangzijiang Shipbuilding Group has exerted its rapid response capacity and strong crisis handling capacity to maintain a sustainable and sound financial situation. Overall, the group's revenue in 2020 reached 14.8 billion yuan, down 37% year on year. Among them, the main shipbuilding business achieved an operating income of 10 billion yuan, down from 13 billion yuan in 2019, mainly due to the reduction in the number of ships delivered in 2020 to 45 from 59 in 2019. Revenue from other ship-related businesses, such as shipping logistics & chartering, ship design services and ship dismantlement, was 200.6 million yuan, down from 260.7 million yuan in the same period in 2019, mainly due to lower chartering rates. 
The company's cash and cash equivalents stood at 6.6 billion yuan as of Dec. 31, 2020, down from 10.2 billion yuan at the end of 2019. As at December 31, 2020, Yangzijiang Shipbuilding Group maintained a sound financial position, with net asset value per share increasing to 8.40 yuan from 7.94 yuan at the end of 2019. This year, 60 ships have been ordered, and Yangzi Changbo Shipbuilding will be restarted to increase capacity 
In terms of new orders, Yangzijiang Shipbuilding Group has withstood various challenges in 2020, with 54 new orders valued at US $1.8 billion, far exceeding the US $830 million in 2019. As of December 31, 2020, Yangzijiang Shipbuilding Group has orders for 83 ships, valued at US $3.09 billion. Entering 2021, Yangzijiang Shipping Group maintains a strong momentum of receiving orders. So far this year, 60 new ships have been ordered with a total value of about $3 billion, the largest new ship order in nearly a decade. A large proportion of the new orders are for container ships, including 43 ships worth $2.6bn, which are expected to maintain the group's margins and secure production for the next two years. These orders do not include any option orders, which, if effective, will further increase the number of orders for hand-held new vessels. To increase capacity, Yangzijiang Shipbuilding Group will resume operations at Jiangsu Yangzi Changbo Shipbuilding in mid-2021. The shipyard stopped work in 2012 because of low orders in the past few years. In order to improve operating efficiency, the group has integrated the construction business of Changbo Shipyard in Jiangsu Province with its other three main shipyards. Expand LNG business and give priority to bulk orders for container ships Optimizing the LNG carrier and container ship market, Yangzijiang Shipbuilding Group is looking for further development in the LNG sector and will give priority to bulk orders for container ships to improve profits. Yangzijiang Shipbuilding Group through the establishment of strategic partnership to create more opportunities for development. In August 2019, Mitsui Shipbuilding, a joint venture shipyard with Mitsui Shipbuilding of Japan, officially started operations. The joint venture will leverage the technical expertise of the partners, enabling the Group to continuously build more complex and technically challenging ships, such as oil and LNG carriers. Looking ahead, Yangzijiang Shipbuilding Group plans to seize the opportunities in the LNG market and the development of LNG carriers to expand the market share of mid-sized LNG carriers, especially among Chinese shipowners, to further expand its customer base. 
On the other hand, the container-shipping market has recovered strongly since the second half of last year, with soaring freight rates allowing container-shipping companies to make substantial profits in the third and fourth quarters of last year, boosting demand and order growth for container ships. However, due to the high entry threshold of the container ship construction market, relatively few shipyards are able to meet the demand of container ship construction. Yangzijiang Shipbuilding has a strong track record in building container ships, which puts it well placed to take advantage of current market opportunities. As shipyards fill up their order-to-order delivery schedules, the group is able to be more selective in terms of customers and types of ships to build. Given the high gross margins on volume orders for container ships, Yangzijiang's management has made a strategic decision to prioritise such orders, which is expected to help the group maintain margins. It is worth mentioning that in December last year, Yangzijiang Shipbuilding Group undertook two of the world's largest 24000TEU VLCSs, which are the container ship types with the largest packing capacity and the largest load ton in the history of the construction of Yangzijiang Shipbuilding Industry. Therefore, Yangzijiang Shipbuilding Industry has become the first private shipbuilding enterprise in China to construct 24000TEU VLCSs. |
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