(Shenzhen Daily)
Updated: 2007-08-08 09:10

Shares of China State Shipbuilding Co, set to become the country's biggest shipbuilder, yesterday extended three days of gains to a record after the company's new name fueled optimism it will further benefit as the industry reorganizes.

The stock rose as much as 7.8 percent to 200.5 yuan (US$26.38) yesterday in Shanghai, the highest share price on mainland stock exchanges, before closing at 191.9 yuan. The stock has gained 23 percent since Aug. 1, when the company changed its name from Hudong Heavy Industry and appointed a new chairman.

The firm is in the midst of buying Shanghai Waigaoqiao Shipbuilding Co, China's biggest shipyard, from Beijing-based parent China State Shipbuilding Corp. The new name reinforces the key role the manufacturer will have as China's yards boost profit and expand production capacity amid surging orders for vessels.

"Changing names means a lot for the company, especially in the long run," said Andy Meng, a Shanghai-based analyst at Morgan Stanley. "It means the company will be the major platform for the overall group restructuring."

Profit at Chinese shipyards surged 151 percent to 6.4 billion yuan (US$846 million) in the first half as sales jumped 54 percent to 80.7 billion yuan, the China Association of the National Shipbuilding Industry said Aug. 3 on its Web site. Orders rose 165 percent to a record 42.6 million deadweight tons.

China State Shipbuilding Co appointed Chen Xiaojin as its new chairman, the company said in an Aug. 1 statement. Chen is also general manager at China State Shipbuilding Corp, the parent.