中远海控(601919) - 2020 Q2 - 季度财报

Definitions Company Profile and Key Financial Indicators Company Information This section provides basic information for COSCO SHIPPING Holdings Co., Ltd., including its names, contact details, and addresses - Basic company information: COSCO SHIPPING Holdings Co., Ltd., stock abbreviation 'COSCO SHIPPING Holdings', A-share code 601919, H-share code 01919[8][14] Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue was 74.05 billion Yuan, a 2.71% increase, while net profit attributable to shareholders was 1.14 billion Yuan, an 8.09% decrease, with operating cash flow reaching 11.44 billion Yuan, up 20.82%, and basic earnings per share at 0.09 Yuan, down 10% Key Accounting Data (January-June 2020) | Key Accounting Data | Current Period (Jan-Jun) (Yuan) | Prior Period (Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 74,052,930,030.58 | 72,101,161,372.87 | 2.71 | | Net Profit Attributable to Shareholders (Yuan) | 1,137,163,927.22 | 1,237,231,471.41 | -8.09 | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (Yuan) | 882,186,026.20 | 1,052,701,299.91 | -16.20 | | Net Cash Flow from Operating Activities (Yuan) | 11,437,691,104.97 | 9,466,838,760.54 | 20.82 | | Asset Status | End of Current Period (Yuan) | End of Prior Year (Yuan) | YoY Change (%) | | Net Assets Attributable to Shareholders (Yuan) | 36,910,948,587.78 | 35,359,676,133.83 | 4.39 | | Total Assets (Yuan) | 254,382,094,842.74 | 262,224,029,547.74 | -2.99 | Key Financial Indicators (January-June 2020) | Key Financial Indicators | Current Period (Jan-Jun) | Prior Period | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/Share) | 0.09 | 0.10 | -10.00% | | Diluted Earnings Per Share (Yuan/Share) | 0.09 | 0.10 | -10.00% | | Basic EPS (Excluding Non-recurring Items) (Yuan/Share) | 0.07 | 0.09 | -22.22% | | Weighted Average Return on Net Assets (%) | 3.15 | 4.41 | Decreased by 1.26 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Items) (%) | 2.44 | 3.75 | Decreased by 1.31 percentage points | Non-recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 255 million Yuan, primarily from 575 million Yuan in non-current asset disposal gains and 88 million Yuan in government subsidies, after deducting minority interest and income tax impacts Non-recurring Gains and Losses Items (January-June 2020) | Non-recurring Gains and Losses Items | Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | 575,251,848.27 | | Government Subsidies Recognized in Current Profit/Loss | 87,601,446.77 | | Gains/Losses from Fair Value Changes of Trading Financial Assets/Liabilities | -51,168,136.34 | | Other Non-operating Income/Expenses | -1,448,355.37 | | Impact on Minority Interests | -260,735,716.86 | | Income Tax Impact | -94,523,185.45 | | Total | 254,977,901.02 | Business Overview Principal Businesses and Operating Model The company's core businesses are container shipping and terminal operations, providing global container transportation services through COSCO SHIPPING Lines and OOCL, and terminal handling services through COSCO SHIPPING Ports, with performance driven by global trade, supply-demand, and operational efficiency - The company primarily engages in international and domestic container shipping and terminal handling operations, managing 278 international routes and calling at 334 ports in approximately 102 countries and regions globally as of the reporting period end[22] - Terminal operations span China's five major coastal port clusters and key overseas hubs, managing 360 berths across 36 ports worldwide with a total target annual handling capacity of approximately 133 million TEU[25] Analysis of Core Competencies The company's core competencies include its significant scale, ranking third globally in container fleet capacity and first in terminal throughput, extensive global network coverage, innovative business model, and strong business synergy through dual-brand and port-shipping integration - Significant scale advantage: As of the reporting period end, the self-operated container fleet capacity was approximately 2.92 million TEU, ranking third globally, while its container terminals' total throughput in 2019 ranked first worldwide[27] - Global presence: Container shipping business covers 334 ports in 102 countries and regions globally; port business has invested in 46 terminals across 36 ports worldwide[28] - Business synergy: Achieved through complementary 'COSCO SHIPPING' and 'OOCL' dual brands, strengthening port-shipping and sea-rail integration to provide end-to-end logistics solutions for clients[30] Discussion and Analysis of Operations Overview of Operations In H1 2020, despite COVID-19 impacts, the company achieved 74.05 billion Yuan in operating revenue, up 2.71%, and 1.14 billion Yuan in net profit attributable to parent, leveraging scale, optimizing global routes, enhancing end-to-end services, and accelerating digital transformation, effectively managing market challenges through dual-brand synergy and cost control - In the first half, the company's dual-brand container fleet completed 11.85 million TEU in cargo volume, a 4.93% decrease year-on-year, while COSCO SHIPPING Ports handled 57.63 million TEU in total throughput, down 3.56%[32] - The company strengthened its emerging market presence, with third-country cargo volume increasing from 37.0% of total foreign trade volume at the end of 2019 to 38.6%[33] - The company actively controlled costs, capitalized on low fuel prices for procurement, and strengthened cash and debt management, leading to a significant year-on-year decrease in financial expenses and a 1.51 percentage point reduction in the asset-liability ratio from the beginning of the period[36] Analysis of Principal Businesses During the reporting period, container shipping revenue was 71.59 billion Yuan, up 3.89% with an 8.64% gross margin, while terminal business revenue was 3.23 billion Yuan, down 27.74% with a 23.00% gross margin; equipment and cargo transportation costs were the largest component at 51.82% of total costs, and despite lower total cargo volume, route revenue grew 4.76% due to strong intra-Asia growth Key Financial Statement Items Changes (Year-on-Year) | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 74,052,930,030.58 | 72,101,161,372.87 | 2.71 | | Operating Costs | 67,128,987,357.89 | 64,232,252,510.83 | 4.51 | | Financial Expenses | 2,033,087,668.41 | 2,540,723,268.10 | -19.98 | | Net Cash Flow from Operating Activities | 11,437,691,104.97 | 9,466,838,760.54 | 20.82 | | Net Cash Flow from Investing Activities | -1,171,144,306.94 | -5,601,592,704.10 | 79.09 | | Net Cash Flow from Financing Activities | -15,014,023,597.67 | -5,017,931,103.37 | -199.21 | Principal Business by Segment | Segment | Operating Revenue (Yuan) | Operating Costs (Yuan) | Gross Margin (%) | Operating Revenue YoY (%) | Operating Costs YoY (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Container Shipping | 71,587,784,399.87 | 65,402,992,213.15 | 8.64 | 3.89 | 4.54 | | Terminal Business | 3,224,615,316.06 | 2,482,801,689.96 | 23.00 | -27.74 | -15.50 | Group Cargo Volume and Route Revenue (By Route) | Route | Cargo Volume (TEU) | Cargo Volume YoY (%) | Route Revenue (Thousand Yuan) | Route Revenue YoY (%) | | :--- | :--- | :--- | :--- | :--- | | Trans-Pacific | 2,147,936 | -3.88 | 19,290,534 | 1.19 | | Asia-Europe (incl. Mediterranean) | 2,271,265 | -5.60 | 15,146,881 | 7.01 | | Intra-Asia (incl. Australia) | 3,799,831 | -1.26 | 18,208,957 | 13.73 | | Other International (incl. Atlantic) | 1,145,208 | -6.28 | 9,077,840 | 2.10 | | Mainland China | 2,481,448 | -9.71 | 5,143,760 | -9.95 | | Total | 11,845,688 | -4.93 | 66,867,972 | 4.76 | Assets, Liabilities, and Investment Status During the reporting period, the company's asset-liability structure improved, with short-term borrowings decreasing by 40.90% and other current liabilities increasing by 66.67% due to ultra-short-term bond issuance; the company realized approximately 482 million Yuan in net profit from equity disposals and made significant non-equity investments, ordering five 23,000 TEU container vessels for approximately 778.4 million USD - The company sold equity in Zhangjiagang Terminal, Yangzhou Yuanyang Terminal, and Jiangsu Changjiang Petrochemical Co., Ltd., realizing approximately 482 million Yuan in net profit[54] Key Balance Sheet Items Changes | Item Name | Amount at End of Current Period (Yuan) | Amount at End of Prior Year (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Short-term Borrowings | 8,718,543,103.05 | 14,752,031,130.74 | -40.90 | | Other Current Liabilities | 2,500,000,000.00 | 1,500,000,000.00 | 66.67 | | Assets Held for Sale | 0.00 | 1,896,903,609.60 | -100.00 | - OOCL ordered five 23,000 TEU container vessels for a total price of 778.4 million USD (approximately 5.40 billion Yuan), constituting a significant non-equity investment and related party transaction[63] Analysis of Major Holding and Participating Companies The company primarily operates through three major subsidiaries: COSCO SHIPPING Lines, OOCL, and COSCO SHIPPING Ports, with COSCO SHIPPING Lines achieving 48.54 billion Yuan in revenue and 637 million Yuan in net profit, OOCL 24.12 billion Yuan in revenue and 718 million Yuan in net profit, and COSCO SHIPPING Ports 3.23 billion Yuan in revenue and 1.15 billion Yuan in net profit during the first half Performance of Major Subsidiaries in H1 2020 | Subsidiary Name | Principal Business | Operating Revenue (Billion Yuan) | Net Profit Attributable to Parent (Billion Yuan) | | :--- | :--- | :--- | :--- | | COSCO SHIPPING Lines | Container Shipping | 48.542 | 0.637 | | OOCL | Container Shipping and Logistics | 24.123 | 0.718 | | COSCO SHIPPING Ports | Terminal Management and Operations | 3.225 | 1.150 | Potential Risks The company faces significant risks including the COVID-19 pandemic's potential adverse impact on global economy and shipping logistics, investment decision uncertainties involving domestic and overseas M&A and infrastructure projects, and cost management challenges due to reduced terminal efficiency and increased variable costs caused by the pandemic - COVID-19 pandemic risk: The global outbreak may significantly impact the global and Chinese economies, directly challenging the shipping and logistics industry[68] - Investment decision risk: The company engages in various investment activities, with target achievement subject to multiple internal and external uncertainties[70] - Cost and expense management risk: Pandemic impacts have led to inefficient terminal operations and extended container turnaround times, increasing route operating costs[71] Significant Matters Profit Distribution and Commitment Fulfillment During the reporting period, the company did not propose a half-year profit distribution or capital reserve capitalization plan, and all commitments made by the company and related parties, including the actual controller and shareholders, were strictly fulfilled without any breaches - The company has no half-year profit distribution or capital reserve capitalization plan[74] - Commitments made by the company's actual controller, shareholders, and related parties regarding maintaining independence, resolving horizontal competition, and regulating related party transactions were strictly fulfilled during the reporting period[75][76][77] Equity Incentive and Employee Stock Ownership During the reporting period, the company adjusted its stock option incentive plan to include directors, granting 16.98 million reserved stock options to 39 grantees; additionally, subsidiary Shanghai Pan Asia Shipping Co., Ltd. continued its employee stock ownership plan, with the employee stock ownership platform holding 8% equity, and COSCO SHIPPING Ports Limited's stock option plan is also underway - On May 29, 2020, the company granted 16.98 million reserved stock options to 39 grantees[83] - The employee stock ownership platform of subsidiary Shanghai Pan Asia Shipping Co., Ltd. holds 8% of its equity, with 150 participating employees[84] Significant Related Party Transactions and Contracts During the reporting period, the company engaged in various routine related party transactions totaling approximately 25.05 billion Yuan, primarily for vessel and container asset services, shipping services, and terminal services; significant occasional related party transactions included OOCL's order for five 23,000 TEU container vessels totaling approximately 5.40 billion Yuan; the company also provided 42.04 billion Yuan in guarantees for subsidiaries, representing 59.29% of its net assets - Routine related party transactions totaled approximately 25.05 billion Yuan, primarily with parent company COSCO SHIPPING Group and its affiliates, with pricing consistent with market rates[87][89][90] - Significant related party transaction: OOCL signed shipbuilding agreements with related parties to purchase five 23,000 TEU container vessels for a total price of 778.4 million USD (approximately 5.40 billion Yuan)[91] Total Company Guarantees | Guarantee Item | Amount (Yuan) | | :--- | :--- | | Total Guarantee Balance for Subsidiaries at Period End (B) | 42,038,431,833.06 | | Total Guarantees (A+B) | 42,038,431,833.06 | | Percentage of Total Guarantees to Company's Net Assets (%) | 59.29 | Changes in Ordinary Shares and Shareholder Information Share Capital Changes and Shareholder Information During the reporting period, the company's total share capital remained unchanged at 12,259,529,227 shares; the proportion of unrestricted shares increased from 83.33% to 91.67% due to the listing of 1,021,627,435 restricted shares; as of the reporting period end, total shareholders were 257,833, with China Ocean Shipping Company Limited (37.18%) and HKSCC NOMINEES LIMITED (21.05%) as the top two shareholders - During the reporting period, 1,021,627,435 restricted non-public offering shares became tradable on February 3, 2020, increasing the proportion of unrestricted shares[113] - As of the reporting period end, the company had 257,833 ordinary shareholders[116] Top Three Shareholders' Holdings | Shareholder Name | Shares Held at Period End | Percentage (%) | | :--- | :--- | :--- | | China Ocean Shipping Company Limited | 4,557,594,644 | 37.18 | | HKSCC NOMINEES LIMITED | 2,580,600,000 | 21.05 | | China COSCO Shipping Group Co., Ltd. | 1,021,627,435 | 8.33 | Corporate Bonds Information Overview of Corporate Bonds and Solvency As of the reporting period end, the company had two outstanding USD bonds totaling 1 billion USD and 300 million USD, both traded on the Hong Kong Stock Exchange with timely interest payments; the asset-liability ratio was 72.13%, down 1.51 percentage points from year-end, and the EBITDA interest coverage ratio improved to 4.49x from 3.62x, indicating stable solvency, with two tranches of medium-term notes also paid on time Basic Information on Outstanding Corporate Bonds | Bond Abbreviation | Code | Maturity Date | Bond Balance (Billion USD) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | | COSFINB2212 | 04584 | 2022/12/3 | 1.00 | 4.000 | | CSPFINN2301 | 5900 | 2023/1/31 | 0.30 | 4.375 | - As of June 2020, the Group's bank credit facility was 154.96 billion Yuan, with 100.74 billion Yuan utilized and 54.22 billion Yuan unused[134] Key Solvency Indicators | Key Indicator | End of Current Period/Current Period | End of Prior Year/Prior Period | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 72.13 | 73.64 | Decreased by 1.51 percentage points | | EBITDA Interest Coverage Ratio | 4.49 | 3.62 | 24.12% | Financial Report Financial Statement Summary As of June 30, 2020, the company's total assets were 254.38 billion Yuan, total liabilities 183.48 billion Yuan, and equity attributable to parent company owners 36.91 billion Yuan; in H1 2020, operating revenue was 74.05 billion Yuan, operating costs 67.13 billion Yuan, net profit 1.94 billion Yuan (of which 1.14 billion Yuan was attributable to parent shareholders), and net cash flow from operating activities was a robust 11.44 billion Yuan Consolidated Balance Sheet Summary (June 30, 2020) | Item | Amount (Yuan) | | :--- | :--- | | Assets | | | Total Current Assets | 65,415,741,532.79 | | Total Non-current Assets | 188,966,353,309.95 | | Total Assets | 254,382,094,842.74 | | Liabilities and Owners' Equity | | | Total Current Liabilities | 69,184,637,820.15 | | Total Non-current Liabilities | 114,294,967,973.39 | | Total Liabilities | 183,479,605,793.54 | | Total Equity Attributable to Parent Company Owners | 36,910,948,587.78 | | Minority Interests | 33,991,540,461.42 | | Total Owners' Equity | 70,902,489,049.20 | Consolidated Income Statement Summary (January-June 2020) | Item | Amount (Yuan) | | :--- | :--- | | I. Total Operating Revenue | 74,052,930,030.58 | | II. Total Operating Costs | 73,780,526,424.80 | | Including: Operating Costs | 67,128,987,357.89 | | III. Operating Profit | 2,277,601,417.25 | | IV. Total Profit | 2,282,565,851.63 | | V. Net Profit | 1,938,332,362.26 | | Net Profit Attributable to Parent Company Shareholders | 1,137,163,927.22 | | Minority Interest Income/Loss | 801,168,435.04 | Consolidated Cash Flow Statement Summary (January-June 2020) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 11,437,691,104.97 | | Net Cash Flow from Investing Activities | -1,171,144,306.94 | | Net Cash Flow from Financing Activities | -15,014,023,597.67 | | Net Increase in Cash and Cash Equivalents | -4,362,138,331.11 | Summary of Notes to Consolidated Financial Statements Notes to financial statements indicate the company's cash and cash equivalents were 46.05 billion Yuan at period-end; fixed assets totaled 103.83 billion Yuan, with vessels being the largest component; goodwill was 6.24 billion Yuan, primarily from the OOCL acquisition; long-term borrowings and lease liabilities were major non-current liabilities, and segment information shows container shipping as the primary source of revenue and assets - At period-end, the book value of fixed assets was 103.83 billion Yuan, with vessel assets at 66.10 billion Yuan and container assets at 15.26 billion Yuan[277][279] - At period-end, the book value of goodwill was 6.24 billion Yuan, with 5.02 billion Yuan attributed to the acquisition of Orient Overseas (International) Limited[288] Segment Information (January-June 2020) | Item | Container Shipping Business (Yuan) | Terminal Business (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | | Operating Revenue | 71,587,784,399.87 | 3,224,615,316.06 | 74,052,930,030.58 | | Total Assets | 171,581,132,203.54 | 73,299,019,935.85 | 254,382,094,842.74 | | Total Liabilities | 119,462,530,200.05 | 32,288,123,001.07 | 183,479,605,793.54 | Supplementary Information During the reporting period, total non-recurring gains and losses were 255 million Yuan, primarily from non-current asset disposals; net profit attributable to ordinary shareholders after deducting non-recurring items was 882 million Yuan; weighted average return on net assets was 3.15%, and basic earnings per share was 0.09 Yuan Return on Net Assets and Earnings Per Share | Profit for the Period | Weighted Average Return on Net Assets (%) | Basic Earnings Per Share (Yuan) | Diluted Earnings Per Share (Yuan) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Company | 3.15 | 0.09 | 0.09 | | Net Profit Attributable to Ordinary Shareholders of the Company (Excluding Non-recurring Items) | 2.44 | 0.07 | 0.07 | Documents for Reference