Summary of China Merchants Energy Shipping Company Conference Call Company Overview - **Company**: China Merchants Energy Shipping Company (招商轮船) - **Industry**: Shipping and Logistics Key Points Industry Performance - The container shipping business has performed exceptionally well, offsetting pressures in the oil shipping market, showcasing stable operational capabilities through diversification [2][3] - The global oil shipping market is experiencing improvements due to OPEC's production cuts and geopolitical factors, with potential demand growth expected in the first half of 2025 [2][7] - OPEC's unexpected production increase is anticipated to significantly boost global oil trade volumes, benefiting the oil shipping industry [8][9] Financial Performance - In the first half of 2025, the company reported a net profit of 2.12 billion yuan, with the oil shipping segment performing strongly and container shipping growing by 15% year-on-year [5][21] - Despite a 15% year-on-year decline in net profit, the second quarter showed a recovery with a profit of 1.26 billion yuan, marking a 40% increase from the first quarter [21] Container Shipping Developments - The company is focusing on small-scale operations primarily in Southeast Asia and Northeast Asia, with recent expansions into Mexican routes [4] - The company plans to independently operate LNG vessels in the near future, indicating a strategy of diversification in container shipping [4] Oil Shipping Market Insights - The oil shipping market has seen a restructuring of trade patterns, with average shipping distances increasing by approximately 7% since the second half of 2022 [6] - Factors contributing to the decline in oil shipping market conditions in the second half of 2024 include geopolitical tensions and reduced demand from China [7] - The anticipated increase in oil production from South America in the second half of 2025 is expected to enhance global oil shipping demand [11] Dry Bulk Shipping Outlook - The Simandou project is set to commence production in November 2025, expected to significantly increase global iron ore shipping volumes [18] - The dry bulk market has faced challenges, with average annual growth rates around 3%, but potential exists for future demand growth [15][17] Long-term Industry Trends - The company is well-positioned to benefit from ongoing trends in oil and iron ore production increases, with a stable outlook for the next two years [14][22] - The aging fleet and limited new ship orders are expected to create supply rigidity, supporting market conditions for the company [14] Shareholder Returns - The company has a strong commitment to shareholder returns, with a dividend payout ratio of 40% [22] Additional Insights - The company’s diversified operations across multiple segments have allowed it to maintain stable performance despite market fluctuations [3][22] - The ongoing geopolitical tensions and changes in trade routes are influencing shipping dynamics, particularly in oil and dry bulk sectors [10][12][19]

公司发布的半年报数据显示，上半年公司共实现营业收入125.85亿元，同比下降4.91%，实现净利润 21.25亿元，同比下降14.91%，基本每股收益为0.2600元，加权平均净资产收益率5.28%。 机构评级来看，近一个月该股获10家机构买入评级。预计目标价最高的是国泰海通，9月9日国泰海通发 布的研报给予公司目标价9.71元。（数据宝） 招商轮船9月11日披露，截至9月10日公司股东户数为97691户，较上期（8月31日）减少7743户，环比降 幅为7.34%。 证券时报·数据宝统计，截至发稿，招商轮船收盘价为8.09元，下跌0.12%，本期筹码集中以来股价累计 上涨24.65%。具体到各交易日，7次上涨，2次下跌，其中，涨停1次。 （文章来源：证券时报网） ...

Group 1 - The stock price of China Merchants Energy Shipping Co., Ltd. (招商轮船) increased by 5.29% on September 9, reaching 8.36 CNY per share, with a trading volume of 9.65 billion CNY and a turnover rate of 1.48%, resulting in a total market capitalization of 675.03 billion CNY [1] - The stock has experienced a continuous rise for six days, accumulating a total increase of 22.34% during this period [1] - The company's main business involves international crude oil, domestic and international dry bulk, domestic roll-on/roll-off, and domestic and international general cargo shipping, with transportation services accounting for 86.38% of its revenue [1] Group 2 - According to data from the top ten heavy stocks of funds, Qianhai Kaiyuan Fund has a significant holding in China Merchants Energy Shipping, with its Qianhai Kaiyuan Value Strategy Stock Fund (005328) increasing its holdings by 28.43 thousand shares in the second quarter, totaling 65.94 thousand shares, which represents 8.29% of the fund's net value [2] - The fund has generated a floating profit of approximately 276,900 CNY today, and during the six-day rising period, the floating profit reached 956,100 CNY [2] - The Qianhai Kaiyuan Value Strategy Stock Fund was established on December 22, 2017, with a current scale of 49.7753 million CNY, yielding 14.58% this year and 35.94% over the past year [2]

Group 1 - Shipping concept stocks showed strong performance in early trading [1] - China Merchants Energy (招商南油) and China Merchants Industry (招商轮船) reached the daily limit up [1] - COSCO Shipping Energy (中远海能) increased by over 8% [1] - COSCO Shipping Special (中远海特) also experienced a rise [1]

Investment Rating - The report maintains a "Buy" recommendation for the oil tanker sector and dry bulk sector, highlighting potential opportunities in both areas [3][24]. Core Insights - The VLCC freight rates have continued to rise, with the Clarkson VLCC-TCE index reaching $56,000 on September 5, marking a week-on-week increase of 34% [1][10]. - The report emphasizes the elasticity of oil tanker rates as the market approaches the peak season, driven by expected OPEC+ production increases and recovering refinery utilization rates [19][20]. - The dry bulk market is anticipated to gradually recover, supported by low supply growth and potential demand increases from upcoming projects and economic factors [23]. Summary by Sections Focus on Oil Tankers and Dry Bulk Opportunities - VLCC freight rates have shown significant increases across various routes, with Middle East to China rates at $58,000/day, up 38% week-on-week [1][10]. - OPEC+ is expected to increase production by approximately 137,000 barrels per day in October, which may contribute to higher freight demand [19]. - Refinery utilization rates have improved, with major refineries operating at 81.59%, a 0.2 percentage point increase from the previous week [19]. Industry Data Tracking - The Baltic Dry Index (BDI) was reported at 1979 points, down 2.3% week-on-week, indicating a mixed performance in the dry bulk sector [23]. - The report notes that the supply side remains constrained, with only 10.4% of dry bulk vessels on order, suggesting limited capacity growth in the coming years [23]. Market Review - The transportation sector experienced a decline of 1.4% in the week, underperforming the CSI 300 index by 0.6 percentage points [64]. - Notable stock performances included significant gains for companies like China Merchants Energy and China Merchants Jinling, while others like Shentong Express saw declines [64]. Investment Recommendations - Continued recommendations for the oil tanker sector include China Merchants Energy, China Merchants Jinling, and China Merchants South Oil [24]. - For the dry bulk sector, recommendations include Haitong Development and China Merchants Jinling, with a suggestion to pay attention to Pacific Shipping [24].

Core Viewpoint - The shipping and port sector is experiencing significant activity, with multiple stocks reaching their daily limit up, driven by advancements in green transformation and smart upgrades in the Yangtze River shipping industry [1][2]. Group 1: Stock Performance - Stocks such as China Merchants Energy (招商南油) and China Merchants Shipping (招商轮船) have hit the daily limit up, while COSCO Shipping Energy (中远海能) rose over 8% [1]. - Other notable performers include China National Offshore Oil Corporation (国航远洋) up over 7%, Ningbo Ocean Shipping (宁波远洋) up over 6%, and Nanjing Port (南京港) up over 5% [1][2]. Group 2: Industry Developments - The Yangtze River shipping sector has made significant progress in green transformation, with over 1,000 new energy inland vessels already in operation [2]. - The construction of 132 new energy vessels on the Sichuan to Anhui section of the Yangtze River has been completed, with an additional 406 expected by 2025 [2]. - The use of shore power for vessels has become routine, with an expected electricity consumption of 190 million kilowatt-hours in 2024, effectively reducing carbon emissions [2]. Group 3: Market Opportunities - The demand for new energy vessels is rapidly increasing, including various power types such as lithium batteries and green methanol, which will drive the transformation and upgrade of shipbuilding enterprises [3]. - The push for smart port construction is increasing the demand for automation and intelligent upgrades in port facilities, creating new market opportunities for equipment manufacturers [3]. - The establishment of a smart shipping system is enhancing operational efficiency, significantly reducing time in processes such as vessel passage and anchoring, while green technologies are lowering operational costs and improving overall industry competitiveness [3]. Group 4: Key Listed Companies - COSCO Shipping Energy (中远海能) is a leading shipping company in China, heavily investing in the transformation towards new energy vessels [4]. - China Merchants Shipping (招商轮船) has a diversified fleet and is actively investing in new energy vessels and smart shipping, enhancing its market competitiveness [4]. - Ningbo Ocean Shipping (宁波远洋) has a strong presence in the Yangtze River Delta and excels in the smart upgrade of ports [4]. - Nanjing Port (南京港) is a crucial port in the lower Yangtze River, leading in smart and green port transformation, showcasing strong development potential [4].

Investment Rating - The report maintains an "Accumulate" rating for the oil transportation industry, particularly for VLCC (Very Large Crude Carrier) market [6]. Core Viewpoints - The VLCC freight rates have been continuously rising since August, driven by OPEC+ production increases and market demand, with rates for the CT1 route increasing from $17,971/day on August 1 to $51,664/day by September 5, and CT2 route rates rising from $26,931/day to $62,949/day in the same period [1][2]. - OPEC+ is expected to continue increasing production, which will likely shift towards exports, positively impacting VLCC demand. The actual production increase from OPEC+ was 427,000 barrels/day in June and 308,000 barrels/day in July, with a forecasted increase in exports as summer demand subsides [2]. - The fourth quarter is anticipated to be a peak season for crude oil demand in the Far East, with historical data showing that Q4 freight rates are generally higher than Q3 rates, except for 2020. The report suggests a high probability of rising freight rates in Q4 2025 due to OPEC+ production and seasonal demand [3]. - Increased sanctions on non-compliant markets by Western countries are expected to benefit compliant VLCC demand in the medium to long term. The report discusses two scenarios regarding sanctions on Iranian oil, indicating that if sanctions are enforced, demand may shift to compliant markets, enhancing VLCC demand [4]. Summary by Sections - **VLCC Freight Rates**: Continuous increase in VLCC freight rates since August due to OPEC+ production and market demand [1]. - **OPEC+ Production Impact**: OPEC+ production increases are expected to positively affect VLCC demand as summer demand wanes [2]. - **Seasonal Demand**: Anticipation of higher freight rates in Q4 due to seasonal demand patterns [3]. - **Sanctions and Market Dynamics**: Potential benefits for compliant markets due to increased sanctions on non-compliant oil exports [4]. - **Investment Recommendations**: The report suggests focusing on companies like China Merchants Energy and COSCO Shipping Energy, with expectations of significant earnings elasticity in the upcoming quarters [5].

Core Insights - The shipping and port sector experienced a rise of 0.55% on September 5, with China Merchants Energy leading the gains [1] - The Shanghai Composite Index closed at 3812.51, up 1.24%, while the Shenzhen Component Index closed at 12590.56, up 3.89% [1] Sector Performance - The top performers in the shipping and port sector included: - China Merchants Tire (601872) with a closing price of 7.22, up 5.87%, and a trading volume of 1.6672 million shares, totaling 1.193 billion yuan [1] - COSCO Shipping Energy (600026) closed at 11.08, up 4.73%, with a trading volume of 1.1022 million shares, totaling 1.206 billion yuan [1] - HNA Technology (600751) closed at 4.26, up 3.90%, with a trading volume of 535,300 shares, totaling 224 million yuan [1] Market Capital Flow - The shipping and port sector saw a net inflow of 186 million yuan from main funds, while retail investors experienced a net outflow of 89.98 million yuan [2] - The sector's overall trading activity indicated a mixed sentiment among different investor types, with institutional investors showing a positive trend [2]

Group 1 - The company, China Merchants Energy Shipping Company (招商轮船), announced that it will hold its second extraordinary general meeting of shareholders for 2025 on September 26, 2025 [1] - The agenda for the meeting includes the proposal to change the company's registered capital [1]

Meeting Information - The second extraordinary general meeting of shareholders for 2025 will be held on September 26, 2025, at 10:30 AM [1] - The meeting will take place at Taiziwan Haina Warehouse, No. 5, Cruise Avenue, Wuwan Community, Nanshan District, Shenzhen [1] - Shareholders can vote through the Shanghai Stock Exchange's online voting system from 9:15 AM to 3:00 PM on the same day [1][2] Voting Procedures - Voting will be conducted via both on-site and online methods [3] - Shareholders must register to vote, with registration open from September 5 to September 25, 2025 [5] - Shareholders holding multiple accounts can aggregate their voting rights across all accounts [4] Agenda Items - The meeting will review several proposals, including amendments to the company's articles of association and various governance rules [2][3] - Specific proposals were disclosed on August 28, 2025, and include the 2025 revised version of the company's articles of association [2][3] Attendance Requirements - Only shareholders registered by the close of trading on the record date of September 19, 2025, are eligible to attend [4] - Shareholders may appoint proxies to attend and vote on their behalf [5][6] Contact Information - For inquiries, shareholders can contact the board office at 0755-88237361 [6]