Shares of COMEC (00317) climbed more than 5% during Thursday's trading session before paring gains, currently up 3.32% at HK$14.93 with turnover reaching HK$54.38 million.
During its interim results briefing for fiscal 2026 held on September 14, the company disclosed that it secured 55 newbuild orders across eight vessel types in the first half of the year, primarily comprising container ships. This ongoing optimization of the order mix is expected to underpin improvements in overall gross margins.
As the current order book gradually transitions through construction and delivery phases, the revenue contribution from container vessels is projected to rise accordingly, providing a positive impetus to the company's future profitability. The delivery schedule for the existing order book extends through 2030, with the associated benefits set to materialize progressively over the coming years.
In a recent research note, Zheshang Securities Co., Ltd. (601878) highlighted that COMEC's results aligned with expectations, noting a 59% year-on-year increase in net profit attributable to shareholders for H1 2026 alongside a robustly full order book. The company remains focused on its annual operational targets while deepening lean management practices, which have driven steady improvements in shipbuilding revenue and production efficiency, alongside higher gross profit on products.
Additionally, the performance of associated companies has improved, and dividend distributions from equity investees have increased, resulting in a significant year-on-year surge in recognized investment income. New orders secured during H1 2026 totaled RMB 20.165 billion, up 30.11% year-on-year and achieving 122.8% of the full-year target, with the 55-vessel, eight-type mix dominated by container carriers.
The company's total order book stands at approximately RMB 74.5 billion, of which shipbuilding contracts account for roughly RMB 73.4 billion, comprising 173 vessels and one offshore engineering asset totaling 6.28 million deadweight tonnes. Non-shipbuilding orders, including offshore wind equipment and vessel repair services, amount to around RMB 1.1 billion.
The cyclical upswing in the shipbuilding industry is being driven by the convergence of fleet replacement cycles, environmental regulations, and tight capacity constraints. While the pace of new order growth may decelerate, vessel prices are expected to continue their upward trajectory, supported by the difficulty of capacity expansion and the ongoing replacement cycle bolstered by environmental policies. The brokerage maintains its 'Buy' rating on the stock.
Comments