(Yicai Global) May 16 -- Shares in China State Shipbuilding Corp. advanced as much as 4.8 percent today and the Chinese shipbuilding giant said that, after a difficult first quarter, there will be an uptick in revenue in the second half as the company has orders lined up until the end of 2026.

CSSC’s share price [SHA:600150] closed up 0.5 percent at CNY28.76 (USD4). Earlier in the day it hit CNY30. And yesterday it surged by the exchange-imposed limit of 10 percent.

Shipbuilding is in upward cycle now, and there will be a turning point in revenue intake in the six months ending Dec. 31, CSSC told Yicai Global today, adding that the Shanghai-based company will address horizontal competition within the next four years.

CSSC, which merged with China Shipbuilding Industry in 2019 as part of a state-led initiative to consolidate resources, has shipbuilding orders for the whole year, many of which are for high-end vessels, Topsperity Securities said in a research note.

The Shanghai-based firm's long-term performance is promising as the price of raw materials is dropping, production lines are being upgraded there is better cost control, it said.

The shipbuilding sector is in the midst of a long 20-year industrial cycle and a short cycle of high growth during which performance will improve, it added.

CSSC was under short-term pressure last year, after the spin-off of its power business, losses incurred on its first large cruise ships and other factors, Topsperity said. Last year, the shipbuilder delivered 214 vessels with a deadweight of 17.4 million tons, the brokerage said.

CSSC's net profit tumbled 16.4 percent in the first quarter year on year to CNY43.5 million (USD6.3 million), while revenue slumped 30.9 percent to CNY9 billion (USD1.3 billion), according to its latest earnings results published April 27. In 2022, profit sank by 19.6 percent to CNY172 million while revenue dipped 0.3 percent to CNY59.6 billion (USD8.6 billion).

Unit CSSC Offshore & Marine Engineering Group’s share price [SHA:600685] nudged up 1.7 percent to end the day at CNY28.01 (USD4) and subsidiary Changshu Guorui Technology [SHE:300600] dipped 0.9 percent to finish at CNY12.34.

Editor: Kim Taylor