HENGLI Heavy Industries has completed its backdoor listing on the Shanghai Stock Exchange through Songfa, securing Yuan3.9bn ($540m) to fund two shipbuilding projects in Dalian.

Shanghai-listed Songfa, a loss-making ceramic product manufacturer, said in a statement on August 12 that the company had finalised the restructuring, raising close to Yuan4bn from 19 investors to fund its transition from ceramics to shipbuilding.

The transactions include an asset swap for a 50% stake in Hengli, a stock issuance to acquire the remaining shares, and a planned Yuan4bn private placement.

Of this, Yuan3.5bn will be invested in the green high-end equipment manufacturing facility at Hengli Shipbuilding (Dalian), which has a total planned investment of Yuan8bn.

A further Yuan430m will fund the first phase of an international ship research and design centre at Hengli Heavy Industries, with a total planned investment of Yuan740m.

Songfa also confirmed that its subsidiary Hengli Shipbuilding (Dalian) had received a Yuan330m subsidy from local government. This is the yard’s third government subsidy in two months, following Yuan120m and Yuan260m previously disclosed on June 17 and July 18, bringing the total government support to Yuan710m.

According to the transaction agreements, Hengli expects net profits of Yuan1.1bn in 2025, Yuan1.6bn in 2026, and Yuan2.1bn in 2027, bringing total profits over the three years to around Yuan4.8bn.

In its latest publicly available results, Hengli said it had secured orders for 170 newbuildings to date, with production plans running through 2029.

The expansion comes amid a challenging global shipbuilding market.

Citic Securities stated in its latest report that USTR Section 301 actions continued to reshape international shipbuilding, directly driving moves to other regions.

The report noted that, compared with the end of 2024, China’s share of global newbuilding orders had fallen around 20% by July 2025, with sharp declines in oil and gas carriers and containership orders.