US$456 Million in Quarterly Profit: Hengli’s Expansion Drives Stronger Earnings at Songfa

Songfa, the Shanghai-listed parent of Hengli Heavy Industries, reported third-quarter 2026 net profit attributable to shareholders of RMB3.064 billion (approximately US$456 million), up 390.87% year on year and exceeding its entire 2025 earnings. The results show how Hengli’s expanding shipbuilding operations, broader vessel portfolio and investment in equipment manufacturing are translating into stronger profitability.

For the first nine months, Songfa generated revenue of RMB37.774 billion (US$5.63 billion) and attributable net profit of RMB6.673 billion (US$994 million), increases of 221.25% and 424.87%, respectively. Its shipbuilding business is expanding across bulk carriers, tankers, containerships and gas carriers, supported by repeat orders from international owners and a growing ability to manufacture key equipment within the group.

One Quarter’s Earnings Exceed the Previous Full Year

Third-quarter revenue reached RMB14.270 billion (US$2.13 billion), up 180.97% year on year. Attributable net profit increased 21.83% from the second quarter, while net profit excluding non-recurring items reached RMB2.731 billion (US$407 million), up 377.32% from a year earlier.

The progression across 2026 illustrates the improvement in profitability. Attributable net profit increased from RMB1.093 billion (US$163 million) in the first quarter to RMB2.515 billion (US$375 million) in the second and RMB3.064 billion (US$456 million) in the third. Net margins rose from 12.30% to 17.21% and then to 21.47%, with the latest quarter recording a further improvement of 4.26 percentage points.

This follows a rapid expansion in Hengli’s underlying business. Before its injection into Songfa, Hengli Heavy Industries increased annual revenue from RMB663 million (US$99 million) in 2023 to RMB5.496 billion (US$819 million) in 2024. In 2024, it generated net profit of RMB301 million (US$45 million) and profit excluding non-recurring items of RMB231 million (US$34 million).

Following the restructuring in 2025, Songfa reported annual revenue of RMB21.639 billion (US$3.22 billion) and attributable net profit of RMB2.655 billion (US$395 million). Both figures had already exceeded those full-year levels by the first half of 2026. Nine-month attributable earnings are now approximately 2.51 times the previous year’s total.

In its third-quarter report, Songfa attributed the growth to favourable shipbuilding market conditions, a larger business scale and orderbook, and substantial increases in vessels entering construction and being delivered.

A Broader Vessel Portfolio Strengthens Future Business

Hengli’s order intake provides a clear view of how its product mix is developing.

During the first half of 2026, the yard secured orders for 207 vessels: 94 tankers, 56 containerships, 49 bulk carriers and eight very large ammonia carriers, or VLACs. Tankers and containerships together accounted for approximately 72.5% of those orders by vessel count.

The momentum continued into the third quarter, with 46 newbuilding orders secured in July alone across bulk carriers, containerships, tankers and gas carriers.

For a builder that initially developed its commercial vessel business around large bulk carriers, this diversification represents a substantial broadening of its technical capabilities and customer base. Large crude tankers, ultra-large containerships and gas carriers each require different expertise in design, procurement, production planning and commissioning. Sustained contracting across these categories provides the scale to develop several vessel series in parallel.

According to the company’s latest operating update, cumulative orders have exceeded 600 vessels, with delivery schedules extending into 2031. That workload supports longer production runs, coordinated procurement and planning across the yard’s facilities.

Further agreements announced after the third quarter have added to the pipeline. In October, Hengli disclosed contracts for 11 VLACs signed within one week, followed by agreements for 12 tankers comprising six very large crude carriers, two Suezmax tankers and four LR2 product tankers. The six VLCCs carried an average price of nearly US$140 million each.

On 23 October, Hengli announced agreements for another 52 ultra-large LNG dual-fuel containerships: twenty 19,000 TEU vessels, twelve 22,000 TEU vessels and twenty 24,000 TEU vessels. Their combined nominal capacity is 1.124 million TEU.

All 52 ships are to use Hengli-produced LNG dual-fuel main engines and LNG fuel tanks. The programme therefore connects a substantial volume of shipbuilding business with demand for propulsion equipment and fuel storage systems manufactured within the group.

Docks, Engines and Tanks Support Series Construction

Executing this growing workload requires close coordination between shipbuilding facilities, equipment supply and production schedules.

Hengli reports annual steel-processing capacity of three million tonnes and marine engine production capacity of 180 units. Its four large drydocks and substantial building slipways support parallel construction of vessels including VLCCs and large containerships.

Alongside ship construction, the group has developed capacity to manufacture more than 100 sets of large fuel tanks and cargo tanks annually. Tanks, engines and shaft systems have become important elements of its equipment manufacturing capability.

For owners, the commercial value lies in project execution. Hull construction, engine installation, tank integration and commissioning must follow coordinated schedules. Manufacturing key equipment within the same industrial organisation allows technical interfaces and delivery requirements to be addressed earlier. Experience from one vessel can also inform procurement, construction and quality management on subsequent ships in the series.

Recent production milestones illustrate how these capabilities are being applied.

On 22 July, three 306,000-dwt VLCCs and one 325,000-dwt very large ore carrier floated out of Hengli’s No. 1 dock together. The company reported a dock construction cycle of 88 days for the batch, demonstrating its ability to organise different large vessel types within a shared production programme.

On 16 October, the first two 21,000 TEU LNG dual-fuel containerships being built for MSC floated out on the same day. The vessels incorporate Hengli-produced dual-fuel main engines and 13,000-cubic-metre Type C fuel tanks, bringing hull construction, propulsion equipment and fuel storage together in a single series.

Delivery volumes are also increasing. Hengli delivered 11 vessels in August and is targeting approximately 90 deliveries for 2026, followed by more than 120 in 2027. Those plans place continued emphasis on maintaining production continuity from block assembly and dock operations through outfitting, trials and handover.

International Owners Expand Established Relationships

Repeat business from shipowners offers another perspective on Hengli’s development.

In interviews with Xinde Marine News during the third Hengli Green Ship Development Conference in Dalian, George Procopiou, Centrofin chief operating officer Anthony Lambros and Vanhui Shipping’s Yang Chuan discussed their experience of construction quality, delivery performance, engine operation and support after handover.

Procopiou said companies within his shipping interests had ordered 69 vessels of different types from Hengli, including 16 VLCCs. Sixteen vessels across the wider programme had already been delivered.

He praised construction quality, delivery performance, cooperation with his teams and support after handover. His companies’ relationship with Hengli has expanded from bulk carriers into large crude tankers and gas carriers, giving the yard successive opportunities to demonstrate its capabilities across different vessel categories.

Centrofin has followed a similar path. Lambros said the company had ordered eight Kamsarmax bulk carriers and two containerships at Hengli, with six vessels already delivered. He highlighted the practical value of having main engines manufactured on time at the location where the ships are being built.

Vanhui Shipping provided feedback from vessels already operating at sea. Yang Chuan discussed the company’s two Hengli-built 82,000-dwt Kamsarmax bulk carriers, equipped with engines manufactured by Hengli. After approximately a year of operation, he gave a positive assessment of vessel and machinery performance, particularly fuel consumption. The parties are also discussing further bulker and gas carrier projects.

These interviews with Xinde Marine News extend the assessment of Hengli beyond its facilities and ships under construction. Owners’ experience of delivered vessels, equipment performance and technical support provides a commercial basis for further cooperation. As relationships develop across successive projects, manufacturing capability increasingly becomes part of the yard’s international reputation.

Continued Investment Expands the Industrial Base

Songfa’s balance sheet and cash flow statement show that investment is continuing alongside the growth in earnings.

At the end of September, total assets stood at RMB102.732 billion (US$15.30 billion), including fixed assets of RMB24.476 billion (US$3.65 billion) and construction in progress of approximately RMB19.998 billion (US$2.98 billion).

During the first nine months, cash payments for property, plant, equipment, intangible assets and other long-term assets totalled RMB22.380 billion (US$3.33 billion), reflecting continued investment in the industrial base supporting the business.

Operating cash flow also improved substantially. Net cash generated from operating activities reached RMB13.496 billion (US$2.01 billion) for the nine-month period, compared with an outflow a year earlier, providing additional funding for procurement, production and project execution.

The combination of stronger earnings and continued investment reflects a business expanding its current output while building the facilities and equipment capacity required for future programmes.

Employee Participation Supports Longer-Term Development

The expansion also places greater demands on Hengli’s management, engineering and production teams.

On 22 October, Songfa disclosed a draft employee shareholding plan covering up to 5,370 participants, with proposed funding of up to approximately RMB852 million (US$127 million). Directors and senior executives would account for 0.90% of the proposed subscriptions, with other employees accounting for 99.10%. Implementation remains subject to shareholder approval.

Shipbuilding depends on cooperation among many technical disciplines over extended project cycles. Retaining experienced personnel, transferring knowledge between vessel series and maintaining coordination across production teams all influence execution. Broad employee participation can help connect those responsibilities with the company’s longer-term development.

Songfa has also approved a shareholder return plan for 2026–2028, providing a framework for shareholder distributions alongside its investment and business development plans.

At the Dalian maritime exhibition on 28 October, Hengli presented an ambition to build world-class ships and products capable of commanding their value in the global market. Its latest financial results, expanding construction programmes and continuing relationships with international owners give that ambition a more tangible commercial foundation.

For shipowners renewing fleets across the bulk, tanker, container and gas sectors, Hengli is becoming an increasingly established source of newbuilding capacity. Consistent delivery, reliable operation and responsive support after handover will underpin the next stage of its international growth.

US dollar equivalents are approximate, rounded and calculated using the 29 October 2026 central parity rate of US$1 = RMB6.7147.