Zhejiang Shipbuilding Industry “Rebirth Rebirth” attracts capital shipyards to order for two years

In the post-crisis period, the Zhejiang shipping industry is rapidly entering the track of a strong recovery.

In Zhoushan City, Zhejiang's largest shipbuilding and shipping base, this year's seaborne transportation capacity is expected to exceed 4 million dwt, and the shipbuilding completion volume will reach 6 million dwt, which is nearly double that of last year's 3.56 million dwt.

What is even more gratifying is that orders from all over the world continue to fly to Zhejiang shipping companies. Take Jinhai Heavy Industry as an example. As of October of this year, Gimhae Heavy Industry has exceeded 12 million dwt in its orders, and it has already reached two years later.

With the strong recovery of the shipping industry, a large amount of social capital is pouring in. According to a survey conducted by the Zhejiang Banking Regulatory Bureau, in the first 10 months of this year, the amount of non-credit financing of the local shipping industry increased by 1.28 billion yuan, which was 6.25 times the new amount of credit during the same period.

Banks tightened for lack of money for shipbuilding enterprises In the first three quarters of this year, the completed shipbuilding capacity, newly-accepted orders, and hand-held orders for Zhoushan accounted for 12%, 14%, and 12% of the country respectively. Shipping companies have accelerated their transformation into large-scale, specialized, and diversified industries. Dozens of shipping companies such as Deloitte, Zhongchang Shipping, and Chenzhou Group have successively ordered new ships this year, with a total investment of over 3 billion yuan.

This year, the product structure of shipbuilding companies in Zhoushan City has been continuously optimized, and the construction of new shipbuilding models has been highlighted. Suction dredging engineering dredgers, self-propelled semi-submersibles, and oceanic exploration ships and other special vessels appear on the list of shipbuilding companies’ first-hand vessels.

Advanced technology brings a huge market. The relevant person in charge of Zhejiang Shipbuilding Co., Ltd. stated that at present, the company's top product, Ocean Engineering Ships, has accounted for more than 35% of the world market share, and orders have been scheduled for 2012.

However, the investments of shipbuilding and shipping companies are characterized by large amounts of money, long periods of time, and complicated equities. Traditional credit financing considers factors such as the size of credit and the risk of decentralized concentration. The willingness to continuously increase the credit line of the ship industry is not strong. . From January to October this year, the loan balance of the Zhoushan banking financial construction ship industry declined, and the loan for the shipping industry increased slightly, which is in stark contrast to the average annual increase in loans during the peak period of more than 50%.

Hangzhou company involved in the shipbuilding industry However, the good development momentum of the Zhejiang shipping industry this year has attracted a large number of social funds influx.

In recent years, with the rise of financial leasing financing companies, financial leasing has gradually been recognized and accepted by investors for its advantages such as simple procedures, low capital requirements, and improved financial indicators. According to preliminary investigations, this year a total of six shipbuilding enterprises in Zhoushan have used leasing to finance, with financing amounting to 898 million yuan, which is 6.75 times of the city's previous total ship finance leases. In addition, many shipbuilding companies are actively liaising with leasing companies.

It is understood that the financial leasing companies involved mainly in financing leasing companies in Hangzhou, Shanghai, and Ningbo.

After a number of shipping companies are expected to go public next year after five years of repeated arguments, Zhongchang Shipping and ST Hualong, one of the three largest shipping companies in Zhejiang, have obtained conditional approvals, which means that Zhongchang Shipping has successfully achieved reorganization and listing. According to industry insiders, through the expansion of direct financing channels in the capital market, Zhongchang Shipping can solve the financing sustainability issue, and also help establish a modern enterprise system and enhance company awareness.

Not only that, there are many other shipping companies in Zhejiang that have started listing. For companies such as Jinhai Heavy Industry, Yangfan Group and Deloitte Group, the listing work has been planned for many years and is expected to be listed next year.

The sound development prospects of the shipbuilding and shipping industries have attracted many private equity funds, investment companies and entity companies to invest in shares. Large ship companies such as Gimhae Heavy Industry and Yangfan Group have further enhanced their order-taking capabilities and room for growth and upgrade through strategic investments.

Term Explanation Financial leasing, also known as equipment leasing, refers to a lease that transfers substantially all or most of the risks and rewards related to the ownership of an asset. An essential difference between a finance lease and a traditional lease is that a traditional lease calculates the rent based on the amount of time the lessee leases the item, whereas a finance lease calculates the rent on the time that the lessee occupies the financing cost.

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