China Shipbuilding: 3Q26 preview – A seasonal breather, a margin opportunity; buy on dips

J.P. Morgan reiterates Overweight on China shipbuilding stocks and recommends buying on dips ahead of Songfa's 3Q26 results on 28 October and CSSC's on 30 October, raising Dec-27 price targets for CSSC to Rmb52 from Rmb50 and Songfa to Rmb267 from Rmb265. It views the 3%/7% declines in CSSC/Songfa on 9 October (vs. a flat CSI 300) as an opportunity to accumulate, with profit-taking reflecting a perceived catalyst gap following major containership orders and Songfa's Phase 4 expansion announcement, alongside seasonally softer 3Q revenue expectations. Three factors underpin the view: (1) margins continue improving, supporting 3Q NPAT growth of 141%/343% YoY at CSSC/Songfa despite industry-wide seasonal softness; (2) 4Q earnings should accelerate, with NPAT rising 21%/31% QoQ; and (3) the post-Panamax ordering wave remains active. Forecasts CSSC 3Q revenue of Rmb45.8bn (+32% YoY/-5% QoQ) and NPAT of Rmb5.0bn (+141% YoY/-2% QoQ);