COSCO SHIP HOLD(601919)2024-03-28 16:00Financial Performance and Dividends - Net profit attributable to shareholders in 2023 was approximately RMB 23.86 billion[4] - Total cash dividends for 2023 amounted to approximately RMB 11.866 billion, representing about 50% of the net profit[4] - The company plans to distribute a cash dividend of RMB 0.23 per share for the 2023 year-end[4] - The company's parent company's undistributed profit as of December 31, 2023, was approximately RMB 18.657 billion[4] - The total cash dividend for the year is 13.126 billion yuan, accounting for 55.01% of the net profit attributable to ordinary shareholders[135] - The company has a clear three-year shareholder dividend return plan for 2022-2024, with dividends for 2022 and 2023 already distributed[132] Company Address and Contact Information - The company's registered address is in the Tianjin Free Trade Zone[13] - The company's office address is at 658 Dongdaming Road, Shanghai[13] - The company's website is http://hold.coscoshipping.com[13] - The company's email for investor relations is investor@coscoshipping.com[13] - The company's annual report is disclosed on the Shanghai Stock Exchange website (www.sse.com.cn)[14] Container Throughput and Market Conditions - The company's container throughput increased by 4.4% year-on-year to 135.81 million TEUs in 2023, with domestic and overseas throughput rising by 4.8% and 3.1% respectively[37] - The China Containerized Freight Index (CCFI) average decreased by 66.4% year-on-year in 2023 due to demand contraction and supply increase[36] - The global container shipping market faced challenges in 2023, with average freight rates declining and industry profits significantly shrinking compared to 2022[33] Green and Low-Carbon Development - The company's port business achieved a total installed capacity of 10 MW for distributed photovoltaic projects by the end of 2023, with an estimated annual power generation of 9 million kWh[32] - The company plans to focus on digital supply chain and green low-carbon development as key competitive areas in the future[33] - The company will accelerate green and low-carbon transformation to achieve sustainable development of the end-to-end supply chain brand[32] - The company invested 11.519 billion yuan in environmental protection during the reporting period[146] - The company reduced CO2 emissions by 944,435 tons through various carbon reduction measures, including the use of clean energy and carbon reduction technologies[150] - The company signed contracts for 5 methanol dual-fuel ships with a capacity of 24,000 TEU, and announced the construction of 7 methanol-compatible container ships with the same capacity, expected to be delivered in Q3 2026[147] - The company used 2,500.5 tons of biofuel in pilot projects, reducing CO2 emissions by approximately 1,500 tons[150] - The company achieved 100% coverage of shore power facilities at its domestic-controlled terminals[150] - The company implemented ISO14001 and ISO50001 standards to improve environmental and energy management systems[149] - The company developed a seawater desalination system to optimize water resource management, with most ships equipped with desalination devices[147] - The company actively promoted the use of green methanol fuel and advanced ship technologies to enhance fleet efficiency and reduce emissions[147] Leadership and Governance - Chen Yangfan, aged 48, is currently the Vice President and Party Leadership Group Member of China COSCO Shipping Corporation Limited, and also serves as the Executive Director and CEO of Orient Overseas (International) Limited, a subsidiary of the company[101] - Huang Xiaowen, aged 61, previously held the position of Vice President and Party Leadership Group Member of China COSCO Shipping Corporation Limited, and was the Vice Chairman and Executive Director of the company, as well as the Executive Director and CEO of Orient Overseas (International) Limited[101] - Yang Zhiqian, aged 59, is currently the Employee Director of China COSCO Shipping Corporation Limited, and serves as the Executive Director, General Manager, and Party Secretary of the company, as well as the Chairman and Party Secretary of COSCO SHIPPING Lines Co., Ltd., a wholly-owned subsidiary[101] - Zhang Wei, aged 57, is currently the Executive Director, Deputy General Manager, and Deputy Party Secretary of the company, and also serves as the Director, General Manager, and Deputy Party Secretary of COSCO SHIPPING Lines Co., Ltd., a wholly-owned subsidiary[101] - Tao Weidong, aged 53, is currently the General Manager of the Operations Management Department of China COSCO Shipping Corporation Limited and serves as an Executive Director of the company[101] - The company's General Manager, Mr. Tao, has nearly 30 years of experience in enterprise management, with extensive expertise in shipping and logistics operations[102] - Mr. Yu, a non-executive director, holds a Master's degree in Business Administration from the University of Macau and has significant experience in logistics and international business[102] - Professor Ma, an independent non-executive director, is a renowned economist and holds multiple advisory roles in major financial institutions and government bodies[102] - Mr. Shen, an independent non-executive director, is the Executive Vice President of Baidu Group and oversees the Intelligent Cloud Business Group, focusing on industries like manufacturing, energy, and finance[102] - Ms. Xi, an independent non-executive director, has over 30 years of experience in the shipping and logistics industry and holds a Master's degree in Buddhist Studies from the University of Hong Kong[102] - Mr. Wu David, aged 70, has over 20 years of corporate management experience and extensive experience in listed company governance, holding an EMBA from CEIBS and Cheung Kong Graduate School of Business[103] - Mr. Zhou Zhonghui, aged 76, is a senior member of the Chinese Institute of Certified Public Accountants and holds a PhD, serving as an independent non-executive director for several listed companies including CITIC Securities[103] - Mr. Teo Siong Seng, aged 69, is the Executive Chairman of Pacific International Lines (PIL) and has extensive experience in shipping and listed company governance, holding a first-class honors degree in Naval Architecture and Marine Engineering from the University of Glasgow[103] - Mr. Yang Shicheng, aged 59, is the Chairman of the Supervisory Committee and a shareholder supervisor, holding a Master's degree in Commercial Law from the University of Bristol and is a senior economist[103] - Mr. Xu Weifeng, aged 52, is the Employee Representative Supervisor and the Secretary of the Discipline Inspection Commission of COSCO SHIPPING Ports, holding a bachelor's degree in Water Transport Management from Dalian Maritime University and is an engineer[103] - Mr. Song Tao, aged 50, is the Employee Representative Supervisor and Deputy Party Secretary of Shanghai Pan Asia Shipping Co., Ltd., with extensive experience in domestic container shipping operations[103] - The company's annual report for 2023 highlights the leadership and expertise of its board members, including their extensive experience in finance, law, and management[105] - Key executives have a strong background in international finance, capital operations, and cross-border investments, which could influence the company's strategic decisions[105] - The company's leadership includes individuals with significant experience in the shipping and logistics industry, which is crucial for its core operations[105] - Several board members have held prominent positions in major corporations and academic institutions, indicating a strong governance structure[105] - The company's leadership team has a diverse educational background, including advanced degrees in finance, law, and management, which supports informed decision-making[105] - The presence of independent directors with extensive experience in corporate governance and financial oversight ensures robust checks and balances[105] - The company's leadership has a history of involvement in significant international projects, including mergers and acquisitions, which could signal future strategic moves[105] - The board includes members with a strong academic background, contributing to the company's strategic planning and innovation[105] - The leadership team's experience in managing large-scale operations and complex financial structures is a key asset for the company[105] - The company's leadership has a proven track record in navigating regulatory environments and managing risk, which is critical for long-term success[105] - The company's annual report for 2023 highlights key leadership roles and their respective responsibilities, including the CFO, COO, and various subsidiary directors[106][107] - Key executives such as Chen Shuai, Zheng Qi, and Yu Tao hold significant positions in subsidiaries like COSCO Shipping Lines and OOCL, contributing to the company's strategic direction[106] - The company's leadership team includes individuals with extensive experience in logistics, finance, and maritime operations, such as Qian Ming and Wu Yu, who have held various managerial roles within the company[106][107] - The report emphasizes the importance of subsidiaries like COSCO Shipping Lines and OOCL in the company's overall strategy, with executives like Ge Heyue playing crucial roles in these entities[107] - The company's leadership team has a strong educational background, with many holding advanced degrees in business administration, finance, and maritime studies[106][107] - Wan Min serves as Chairman and Party Secretary of China COSCO Shipping Corporation Limited since October 2021[108] - Chen Yangfan was appointed as Executive Director and CEO of Orient Overseas (International) Limited in September 2023[108] - Huang Xiaowen served as Executive Director and CEO of Orient Overseas (International) Limited until September 2023[108] - Yang Zhijian has been a Director of COSCO SHIPPING Ports Limited since April 2022[108] - Zhang Wei was appointed as Chairman and Party Secretary of COSCO SHIPPING Lines Co., Ltd. in June 2022[108] - Tao Weidong has been the General Manager of the Operations Management Department of China COSCO Shipping Corporation Limited since April 2020[108] - Gu Zhongdong served as Vice President of COSCO SHIPPING Lines Co., Ltd. until May 2023[109] - Yu Tao has been a Director of COSCO SHIPPING (Piraeus) Ports Limited since October 2021[109] - Xiao Junguang was appointed as Board Secretary and General Counsel of COSCO SHIPPING Lines Co., Ltd. in August 2022[109] - Ma Shihang has been the Chairman of FWD Group since July 2022[110] - Total remuneration for directors, supervisors, and senior management in 2023 amounted to RMB 67.34 million[113] - The company underwent a significant leadership transition, with multiple new appointments and retirements, including the election of new executive directors and independent directors[114] - The remuneration for directors and supervisors is determined by the shareholders' meeting, while senior management's remuneration is linked to performance and annual assessments[113] - The company's leadership changes included the election of new executive directors, independent directors, and supervisors, as well as the retirement of several key figures[114] - The company's remuneration policy for senior management is based on the "Compensation Management Measures for Enterprise Leaders of COSCO SHIPPING Holdings Co., Ltd."[113] - The company held its 2023 First Extraordinary General Meeting on November 16, 2023, electing Wan Min, Chen Yangfan, Yang Zhijian, Zhang Wei, and Tao Weidong as executive directors, and Yu De as a non-executive director[116] - The company's 7th Board of Directors elected Wan Min as Chairman and Chen Yangfan as Vice Chairman on November 16, 2023[116] - Yang Shicheng was elected as the shareholder representative supervisor and Chairman of the 7th Supervisory Committee on November 16, 2023[117] - The company's 7th Board of Directors reappointed Yang Zhijian as General Manager and Zhang Wei, Ye Jianping, Chen Shuai, Yu Tao, Qian Ming, Wu Yu, and Ge Heyue as Vice General Managers on November 16, 2023[118] - The company's 6th Board of Directors held 6 meetings in 2023, with all directors attending all meetings they were required to attend[120] - The company's Board of Directors has established specialized committees including Audit, Nomination, Compensation, Strategic Development, and Risk Control Committees[122] - The company held 4 audit committee meetings in the reporting period, reviewing financial reports, budgets, and internal audit plans for 2022 and 2023[123] - The company's risk control committee reviewed sustainability reports, internal control evaluations, and risk management manuals in 2023[126] - The company's board of directors approved the 2022 executive compensation plan and stock option incentive adjustments[125] - The company's audit committee reviewed the 2023 Q1, H1, and Q3 financial reports and related audit strategies[123] Employee Composition and Training - The company's total number of employees is 31,654, with 53 in the parent company and 31,601 in major subsidiaries[128] - The company's employee composition includes 5,456 production staff, 8,192 sales staff, and 4,367 technical staff[128] - The company's education level breakdown shows 15,967 employees with a bachelor's degree and 2,337 with a master's degree or higher[128] - The company's total expenditure on labor outsourcing in 2023 was RMB 579 million[131] - The company's training plan for 2023 focuses on supporting strategic transformation and talent development[130] - The company's compensation policy ensures compliance with local laws and provides social insurance and housing funds for employees[129] Stock Option Incentive Plan - The company has implemented a stock option incentive plan, with 1,041,841 shares exercised and registered in Q4 2022[136] - In Q1 2023, 529,650 shares were exercised and registered under the stock option incentive plan[136] - The company adjusted the list of incentive targets and the number of options, canceling 6,251,028 options for 32 retired employees[136] - In Q2 2023, 74,862,652 shares were exercised and registered under the stock option incentive plan[136] - The company canceled 909,811 unexercised stock options for 7 incentive targets in the second exercise period[136] - In Q3 2023, 2,210,659 shares were exercised and registered under the stock option incentive plan[136] - The total number of stock options exercised and transferred by incentive recipients under the stock option incentive plan is 60,079 shares[137] - As of the end of 2023, COSCO Shipping holds 62% of Pan Asia Shipping's equity, with Shanghai International Port Group holding 20%, China Cinda Asset Management holding 6%, and Shenzhen Qianhai Huajian Equity Investment holding 3%[137] - The employee stock ownership plan involves 180 core management personnel, accounting for approximately 27.86% of Pan Asia Shipping's total employees[137] - The total number of stock options granted under the stock option incentive plan for COSCO Shipping Ports is 59,450,724 shares, with 31,635,082 shares canceled or expired by the end of 2023[138] - The stock options granted to senior executives under the stock option incentive plan have all expired by the end of 2023[138] Internal Control and Risk Management - The company's internal control evaluation for 2023 covered major business areas including governance structure, strategic development, human resources, and financial reporting[142] - The company's internal control system operated well in 2023, with no major defects reported[142] - The company's internal control audit report received a standard unqualified opinion[144] - The company's investment management and subsidiary control are regulated by the "Investment Management Measures" and other internal control systems[143] - The company's senior management compensation is linked to performance and task achievement, with annual salaries determined by the board of directors[141] Social Responsibility and Community Projects - The company allocated 614.668 million yuan for poverty alleviation and rural revitalization projects, benefiting 15,000 people[153] - The company donated 40 million yuan to the COSCO Shipping Charity Foundation and contributed to various educational and community projects[153] Related-Party Transactions and Commitments - China COSCO Shipping has fulfilled its commitment to avoid unnecessary related-party transactions with COSCO SHIPPING Holdings since May 5, 2016, and will continue to follow market-oriented pricing principles for necessary transactions[158] - China COSCO Shipping has committed to resolving potential competition issues with COSCO SHIPPING Holdings, particularly in the U.S. port operations, within five years after the acquisition of Orient Overseas International[159] - COSCO has ensured the independence of COSCO SHIPPING Holdings in terms of assets, personnel, finance, and operations since December 11, 2015, and will not interfere with its business decisions[158] - China COSCO Shipping has committed to not engaging in any business activities that may compete with COSCO SHIPPING Holdings' main business since July 7, 2017[159] - COSCO has committed to not engaging in any business that may compete with COSCO SHIPPING Holdings' main business since December 11, 2015[158] - China COSCO Shipping has fulfilled its commitment to resolve competition issues between Orient Overseas International and COSCO Shipping (North America) Inc. in the U.S. port operations[159] - COSCO has committed to not using its position as the largest shareholder to interfere with COSCO SHIPPING Holdings' business decisions or harm its interests since December 11, 2015[158] - China COSCO Shipping has committed to not assisting third parties in engaging in any business activities that may compete with COSCO SHIPPING Holdings' main business since July 7, 2017[159] - COSCO has committed to not occupying funds of COSCO SHIPPING Holdings or its subsidiaries since December 11, 2015[158] - China COSCO Shipping has committed to resolving any potential competition issues with COSCO SHIPPING Holdings through asset restructuring or business integration within five years after the acquisition of Orient Overseas International[159] - The company commits to avoiding and reducing future related-party transactions with COSCO Shipping Holdings, ensuring fairness and compliance with market principles[161] - The company pledges to resolve potential business competition issues through asset restructuring or business integration when appropriate[161] - The company ensures the accuracy and completeness of information provided for transactions, taking legal responsibility for any false or misleading statements[161] - Senior management commits to fulfilling duties diligently, safeguarding the interests of the company and shareholders, and avoiding unfair benefits to others[163] - The company promises to constrain senior management's job-related consumption and prevent misuse of company assets for unrelated investments or activities[163] - The company will link executive compensation and equity incentive plans with the execution of measures to fill diluted immediate returns[163] - COSCO Group commits to not engaging in restricted container shipping business, ensuring the company remains the sole entity for such operations[