Sinolink: The rise of the ocean economy, focusing on the manufacturing of high-end marine equipment.

Sinolink released a research report stating that by 2024, China's total marine economy will reach 10.5 trillion yuan, an increase of 5.9% year-on-year. With continuous policy support, the outlook for China's marine engineering equipment industry is expected to improve, and the industry is optimistic about the continuous increase in revenue for China's leading marine engineering equipment companies. With the frequent introduction of encouraging policies related to "deep-sea technology" domestically, it is expected that orders for underwater operation equipment business for major domestic companies will continue to increase. With the successive introduction of policies to encourage marine economy and deep-sea technology, as well as industry technological progress, China's high-end marine equipment manufacturing industry is expected to accelerate development, recommending China International Marine Containers (000039.SZ), China CSSC (600150.SH), CRRC Corporation (601766.SH). Sinolink's main viewpoints are as follows: The 10 trillion yuan market of the marine economy, accelerating the cultivation of new production forces By 2024, China's total marine economy will reach 10.5 trillion yuan, an increase of 5.9% year-on-year, accounting for 7.8% of GDP. Among them, the value added of marine manufacturing is 3.2 trillion yuan, accounting for over 30% of the total marine production value, and the role of ballast stone continues to show. In addition, China has recently introduced many encouraging policies in the field of marine manufacturing, such as vigorously developing the marine economy in the government work report of 2025, and for the first time including deep-sea technology in the key areas of national future industrial development. In 2025, Guangdong Province proposed to support the development of new marine equipment such as deep diving robots, underwater Siasun Robot & Automation, and support the construction of offshore fishing bases, which is expected to further promote the development of China's marine economy. At the industry end, China made many breakthroughs in marine equipment technology in 2024, such as the official commissioning of the first self-designed and built ocean drilling ship "Dream" and the completion of the 4000-meter sea trial of the deep-sea heavy-duty mining vehicle "Explorer II". In this context, the industry believes that the three sub-sectors of marine engineering equipment, underwater operation equipment, and submarine new infrastructure are expected to usher in accelerated growth. Marine engineering equipment: Upward cycle of marine engineering, policy force assists in promoting revenue growth of industry leaders 1) Upward cycle: Currently, the global marine engineering equipment is in an upward cycle stage, with IHSMarkit predicting that capital spending on offshore oil and gas exploration and development will continue to increase by 2025, benefiting equipment demand such as drilling platforms and FPSO. In 2024, the global transaction of marine engineering equipment reached $27.2 billion, an increase of 85% year-on-year, reaching a ten-year high. At the same time, due to global production capacity constraints, the construction valuation of drilling platforms and new marine vessels exceeded the peak level of 2014. 2) Strong competitiveness in China: In 2024, China undertook 106 marine engineering equipment orders with a total contract amount of $11.6 billion, accounting for 43% of the global order total and remaining the world's top. 3) High industry concentration: China's marine engineering equipment industry has a high concentration, with market share concentrated in leading companies such as Shanghai Zhenhua Heavy Industries, China International Marine Containers, China CSSC, and China Shipbuilding Industry. With continuous policy support, China's marine engineering equipment industry is expected to improve, and the industry is optimistic about the continuous increase in revenue for China's leading marine engineering equipment companies. Underwater operation equipment: "Underwater Great Wall" + "Deep-sea Hoe", helping to maintain maritime sovereignty and resource exploration 1) Why develop underwater operation equipment? First, underwater equipment is the "technical defense line" of maritime sovereignty, helping to maintain national maritime sovereignty; Second, the deep sea is rich in resources but has harsh environments, requiring the assistance of underwater operation equipment for exploration and development. 2) What are the commonly used underwater equipment? The commonly used equipment includes manned/unmanned submersibles (HOV/UUV). According to whether there is an umbilical cable and connection to the mother ship, unmanned submersibles (UUV) are divided into remotely operated underwater vehicles (ROV) and autonomous underwater vehicles (AUV), with ROV currently being the mainstream in the industry. The global UUV market reached $57 billion in 2023, and is expected to increase to $85 billion by 2028, with a CAGR of 8.32%. The Chinese UUV market has high growth, reaching 8.7/11/14 billion yuan in 2021-2023, with a CAGR of 27%. 3) Competitive landscape? The global competitive landscape is relatively concentrated, with North America and Europe dominating the main markets and the top five foreign manufacturers such as Oceaneering holding a 52% global market share in 2023. Major domestic listed companies include CRRC Corporation (subsea remote operation Siasun Robot & Automation) and Shanghai Zhenhua Heavy Industries (subsea operation Siasun Robot & Automation), among others. With the frequent introduction of policies to encourage "deep-sea technology" domestically, it is expected that orders for underwater operation equipment business for major domestic companies will continue to increase. Marine new infrastructure: Submarine observation network + submarine data center, empowering deep-sea research and low-carbon computing power 1) Submarine observation network: Submarine observation networks can provide long-term high-precision observation of marine hydrological and meteorological elements, marine geological disasters, and other data, helping ocean research and protecting national maritime sovereignty. Based on the comparison of the lengths of the coastline between China and the United States and the investment calculation of the United States, the annual market size of China's submarine observation network is approximately 20.2 billion yuan. China's research in the field of submarine observation networks started slightly later than in foreign countries, but has made rapid progress and has achieved independent and controllable core technologies. For example, the experimental system of the South China Sea submarine observation network that was completed in 2016 has a domestication rate of 90%. 2) Submarine data center: Compared to onshore data centers, submarine data centers have the advantages of energy efficiency, low cost, and low latency under consistent network transmission performance. Companies involved in the layout of marine new infrastructure businesses in China include Beijing Highlander Digital Technology, among others. Beijing Highlander Digital Technology has laid out connector box systems in the submarine observation network field and in the submarine data center.The R&D department of Heart Field has built the world's first commercial underwater data center and put it into commercial operation. It is at the forefront of technology.Risk Warning Risks include policy changes falling short of expectations, slower industry technological advancements than expected, and increased market competition.