A shipyard of Tianjin Xingang Shipbuilding Heavy Industry Co in North China's Tianjin File photo: CFP

State-owned China Shipbuilding Industry Corp (CSIC) is undertaking a major restructuring as it grapples with an industry downturn, and it will be the largest restructuring among China's State-owned shipbuilders, the Beijing Business Today reported Monday.

The loss-making company plans to merge six shipbuilding subsidiaries into three, the report said.

The mergers will involve Dalian Shipbuilding Industry Co and Tianjin Xingang Shipbuilding Heavy Industry Co; Bohai Shipbuilding Heavy Industry Co and Shanhaiguan Shipbuilding Industry Co; and Qingdao Beihai Shipbuilding Heavy Industry Co and Qingdao Wuchuan Heavy Industry Co, according to the report.

The six shipbuilders, with total assets of around $150 billion yuan ($22.9 billion), account for the majority of shipbuilding capacity in the area north of the Yangtze River.

Analysts said CSIC's goal is to cut costs. The company lost 2.62 billion yuan in 2015, compared with a profit of 2.12 billion yuan recorded in 2014, according to its annual report released in April.

China is the world's largest shipbuilder by capacity. Although the industry experienced a rebound in new orders in the first four months, it still hasn't fully recovered from a previous downturn.

In the first four months of this year, China completed shipbuilding orders involving 10.79 million deadweight tons (DWT), down 13.5 percent year-on-year, data from the China Association of the National Shipbuilding Industry showed on May 13.

However, new orders rose 108 percent to 13.8 million DWT during the period.

Several leading shipbuilders have filed for bankruptcy amid the downturn. For example, East China's Jiangsu Province-based shipbuilder Sainty Marine Corp began bankruptcy restructuring in February amid market woes, the first listed State-owned shipbuilder to do so.

Global Times