After a year-long process, the "South-North Shipbuilding" merger has reached a crucial milestone. On September 5, China Shipbuilding Industry Company Limited (CSIC, 601989.SH) officially terminated its A-share listing, with shareholders' holdings converted to shares of China State Shipbuilding Corporation Limited (CSSC, 600150.SH) at a ratio of 1:0.1339. Following the integration, China State Shipbuilding's asset scale will exceed 400 billion yuan, making it the world's largest and most comprehensive listed shipbuilding enterprise.
"This integration is not only a key step for China State Shipbuilding Corporation to resolve intra-industry competition, but also an important milestone for China's shipbuilding industry toward high-quality development and reshaping the global shipbuilding market competitive landscape," analyzed Bai Wenxi, Vice Chairman of China Enterprise Capital Alliance.
Notably, ahead of the merger, both China State Shipbuilding and China Shipbuilding Industry Company Limited disclosed impressive interim results for 2025. China State Shipbuilding's net profit attributable to parent company increased by 108.59% year-on-year in the first half, while China Shipbuilding Industry Company Limited saw this metric surge by 227.07%, laying a solid foundation for post-merger development. On September 5, China State Shipbuilding closed at 39.46 yuan per share, up 2.41% from the previous trading day.
**Transaction Enters Share Conversion Implementation Phase**
According to public records, in 1999, the former China State Shipbuilding Corporation was split into China State Shipbuilding Corporation Limited ("South Shipbuilding") and China Shipbuilding Industry Corporation ("North Shipbuilding"). In October 2019, the "South-North Shipbuilding" entities implemented strategic restructuring, establishing China State Shipbuilding Corporation, followed by frequent integration actions among listed company assets.
In September 2024, China State Shipbuilding announced it was planning a share-swap merger with China Shipbuilding Industry Company Limited, whereby China State Shipbuilding would issue A-shares to all shareholders of China Shipbuilding Industry Company Limited.
According to announcements disclosed by China State Shipbuilding on the evening of September 3 this year, the transaction received approval from China Securities Regulatory Commission on July 18, 2025. Per relevant regulations, China Shipbuilding Industry Company Limited submitted its voluntary delisting application to Shanghai Stock Exchange on August 14, 2025, and received acceptance notification on August 18, 2025. On August 29, Shanghai Stock Exchange decided to terminate the listing of China Shipbuilding Industry Company Limited A-shares, with delisting effective September 5, 2025. Due to voluntary delisting circumstances, China Shipbuilding Industry Company Limited A-shares did not enter a delisting consolidation trading period.
The merger's share conversion rules show that September 4 was the equity registration date for this transaction. All China Shipbuilding Industry Company Limited shareholders registered after market close on the equity registration date will have their shares converted to China State Shipbuilding shares at a 1:0.1339 ratio, meaning every 1 share of China Shipbuilding Industry Company Limited will convert to 0.1339 shares of China State Shipbuilding.
For cash dividends declared but not yet collected by China Shipbuilding Industry Company Limited before delisting, China State Shipbuilding will entrust China Securities Depository and Clearing Corporation Limited Shanghai Branch to continue proxy distribution.
After merger completion, China State Shipbuilding will inherit and assume all assets, liabilities, businesses, personnel, contracts, and other rights and obligations of China Shipbuilding Industry Company Limited, implementing effective integration and synergy measures across business, assets, finance, personnel, and organizational aspects.
For example, post-merger, China State Shipbuilding will integrate quality assets under China Shipbuilding Industry Company Limited, including Dalian Shipbuilding, Wuchang Shipbuilding, and Beihai Shipbuilding, promoting synergistic optimization between China State Shipbuilding and China Shipbuilding Industry Company Limited's shipbuilding, repair, and supporting businesses.
Additionally, according to China State Shipbuilding Corporation's previous commitment letter on avoiding intra-industry competition, Hudong-Zhonghua will divest assets unsuitable for listed company injection within three years and propose injection into China State Shipbuilding; intra-industry competition issues involving Huangpu Wenchong and Chongqing Chuandong will be resolved successively.
Notably, this restructuring transaction represents the largest reorganization project in A-share capital market history to date, and the largest enterprise merger case by transaction value in the global shipbuilding industry. Post-merger China State Shipbuilding will have total assets exceeding 400 billion yuan and annual revenue surpassing 130 billion yuan, becoming the world's largest and most comprehensive listed shipbuilding giant.
Industry observers believe that with "South-North Shipbuilding" merger completion, China State Shipbuilding's influence in global shipbuilding markets will further increase. Combined with long-term positive industry fundamentals, its subsequent actions in technology R&D, capacity layout, and overseas expansion will continuously impact global shipbuilding industry competitive dynamics.
Bai Wenxi analyzed that post-merger China State Shipbuilding will become a "super carrier" in global shipbuilding markets, significantly enhancing China's delivery capability and pricing power in high-end vessel segments. The new company, leveraging scale and technological advantages, will also gain greater influence in global shipbuilding standards formulation and brand impact, enhancing the international reputation of the "China State Shipbuilding" brand. Furthermore, this integration will drive collaborative development of domestic shipbuilding supporting industries, promoting overall shipbuilding industry chain upgrades.
Securities institutions are generally optimistic about this merger's value. For instance, on September 2, Huayuan Securities research noted that through restructuring integration, China State Shipbuilding is expected to enhance upstream-downstream synergies and strengthen market competitiveness and profitability.
**"Dual Ships" Achieve Double Growth in Revenue and Net Profit in H1**
This heavyweight merger is supported by impressive performance from both enterprises. On the evening of August 29, China State Shipbuilding and China Shipbuilding Industry Company Limited simultaneously disclosed their 2025 interim reports, with both achieving doubled net profit growth.
China State Shipbuilding achieved operating revenue of 40.325 billion yuan in H1, up 11.96% year-on-year. During the same period, shipbuilding, repair, and marine engineering business revenue reached 38.669 billion yuan, up 12.26% year-on-year; total profit was 3.518 billion yuan, up 129.50% year-on-year; net profit attributable to parent company was 2.946 billion yuan, up 108.59% year-on-year.
Regarding order intake, China State Shipbuilding secured civilian ship orders for 59 vessels/5.4398 million DWT/48.905 billion yuan, ship repair business for 130 vessels/1.117 billion yuan, offshore engineering equipment for 2 vessels/410,000 DWT/2.956 billion yuan, and applied industry contracts worth 1.569 billion yuan. Among new ship orders, mid-to-high-end vessels exceeded 90%, while green vessels exceeded 50%.
As of June 30, 2025, China State Shipbuilding held civilian ship orders for 333 vessels/26.4911 million DWT/233.487 billion yuan; ship repair orders for 74 vessels/766 million yuan, offshore engineering equipment contract orders worth 3.699 billion yuan, and applied industry contract orders worth 2.11 billion yuan.
China State Shipbuilding explained that during the reporting period, the company "focused intensively on production delivery while ensuring production safety," improving lean management levels and steadily enhancing production efficiency. Simultaneously, the shipbuilding industry maintained good overall development momentum, bringing structural upgrades and optimization to the company's order backlog. During the reporting period, civilian ships delivered by the company saw price increases year-on-year, with appropriate construction cost control, leading to increased gross margins year-on-year.
China Shipbuilding Industry Company Limited, which has now officially delisted, also showed strong H1 performance: achieving operating revenue of 32.621 billion yuan, up 47.56% year-on-year; net profit attributable to listed company shareholders of 1.745 billion yuan, up 227.07% year-on-year; net profit attributable to listed company shareholders excluding non-recurring gains and losses of 1.473 billion yuan, up 231.91% year-on-year.
Regarding orders, during the reporting period, China Shipbuilding Industry Company Limited secured new and effective civilian ship orders for 47 vessels (8.3826 million DWT/1.6367 million CGT), with new orders scheduled through 2029. Among new orders, green vessel types accounted for 35.19%, with main ship type ratio and batch order ratio both exceeding 90%; as of end-June 2025, China Shipbuilding Industry Company Limited held orders for 229 vessels (34.9392 million DWT), representing 15.3% growth in DWT terms compared to year-end.
Like China State Shipbuilding, China Shipbuilding Industry Company Limited also stated in its interim report that during the reporting period, the company capitalized on shipbuilding industry development trends, further leveraging main ship type batch construction advantages, strengthening lean management, deepening cost control, and focusing on efficiency and effectiveness improvements. Civilian ship output increased substantially, with corresponding revenue growth and significantly improved operating performance year-on-year.
Regarding future shipbuilding industry trends, China State Shipbuilding noted in its financial report that entering 2025, despite increased market disruption factors and phased pullbacks in new ship transactions, current markets still have multiple supporting forces. In June 2025, the Clarkson Newbuilding Price Index reached 187.11 points, down 1.2% from year-beginning, "showing some softening but remaining at historically relatively high levels overall, reflecting that the market's overall upward trend has not undergone major changes currently."
Goldman Sachs predicted in a September 2 report that driven jointly by environmental regulations, fleet aging, and trade growth, the global shipbuilding industry is entering a "multi-phase, long-term upward cycle" potentially lasting until 2032, bringing new ship orders worth $1.2 trillion. During this expansion, Chinese shipyards will dominate global capacity growth.
"We are optimistic about the shipbuilding industry's long-term upward cycle and believe environmental requirements and aging fleet replacement demand will be key long-term driving factors," the report noted.
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