Shares of SITC International, a leading Chinese shipping company, plummeted 7.26% on Monday morning after the company announced that one of its units had exercised options to construct two new container vessels for a total cost of $57.96 million.

The sizable capital expenditure, which will likely weigh on the company's cash flows and financial position in the near term, appears to have spooked investors. While expanding the fleet could potentially boost SITC's shipping capacity and revenue generation ability down the line, the upfront costs and potential need for additional financing have raised concerns about the company's ability to maintain profitability and returns in the coming quarters.

Analysts will be closely watching SITC's upcoming financial results and management commentary for insights into how the shipbuilding program will impact the company's cash flows, leverage ratios, and overall financial health. In the highly competitive shipping industry, maintaining a strong balance sheet and cost discipline is crucial for long-term success.