(Yicai Global) Sept. 17 -- Chinese shipbuilding companies have more than tripled their order volumes in the first eight months of this year amid green upgrades in the thriving maritime transport sector. But their gains are not similarly promising.

From January to August, the number of new ship orders in China rose more than 220 percent to 49.1 million tons deadweight from a year ago, the Securities Times reported today, citing statistics from the China Association of the National Shipbuilding Industry.

Over the eight months, some 26.3 million DWT of orders were completed, rising by almost 9 percent from a year earlier. Companies in the sector were working on nearly 91.5 million DWT of orders, up 26 percent.

The demand is partly driven by tightening environmental protection regulations. From January 2023, ships that are older than 18 years are not likely to fit the new rules set by the International Maritime Organization, said Han Jun, chief transportation analyst at China Securities.

Despite the rising demand, investors should remain cautious. The developments are in line with global trade trends but the shipbuilding sector is not necessarily entering a big cycle like that of 2007 and 2008, due to the economic situation worldwide, said Zhang Chao, chief military analyst at AVIC Securities.

Stock price jumps of giants such as China State Shipbuilding may be hindered by many factors. Besides the long construction cycle, shipbuilders' profit growth may be limited for other reasons. Firms in the sector are facing great pressures due to rising steel prices, exchange rate fluctuations, and increasing labor costs.

The number of unfulfilled orders equals a fifth of the industry's current capacity, which is much less than the 60 percent ratio logged in 2007, indicating that Chinese shipbuilders are receiving new orders mainly to replace old vessels, said Han.

This year, gains have actually narrowed. Seventy-five major shipbuilding firms in China reported a 15 percent decline in profit to CNY990 million (USD153.4 million) in the first eight months of this year, according to the CANSI. Meanwhile, core revenues climbed 14 percent to CNY193.2 billion (USD29.9 billion).

Editor: Emmi Laine, Xiao Yi