Cabinet plan boosts shipbuilders’ shares
Print Edition
Chinese shipbuilders gained on the stock market yesterday after the government on Sunday issued a three-year plan to upgrade and restructure the struggling industry by 2015.
The State Council plan, which puts a limit on new capacity and encourages companies to make more high-tech vessels, marks the latest government effort to adjust the industry’s growth mode and slash overcapacity.
Shares of CSSC Jiangnan Heavy Industry Co surged by the 10-percent daily limit while China State Shipbuilding Co jumped 6.45 percent in Shanghai. In Hong Kong, the nation’s largest private shipbuilder, China Rongsheng Heavy Industries Group, rose 4.17 percent.
The plan urged the industry to boost innovation and called on local governments to restrict new shipbuilding capacity. It also encouraged financial institutions to provide support so that Chinese shipyards could maintain their international market share.
Analysts said the plan, in addition to President Xi Jinping’s pledge last week to turn China into a maritime power and make maritime industries a pillar of the national economy, could provide a short-term boost to the shipbuilding sector.
Shipyards should develop more high-end offshore engineering equipment, according to the cabinet plan.
“Developing offshore engineering products and specialized vessels is not just an upgrade plan for 2013-2015, but also the direction of the future,” Northeast Securities analyst Wu Jiangtao suggested.
China’s shipyards have been hit by overcapacity, a slump in new orders and declining new-ship prices. The combined profits of 80 major shipbuilders and shipbuilding-related firms tumbled 53.6 percent to 3.58 billion yuan (US$584 million) in the first half, the China Association of the National Shipbuilding Industry said.
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