中国船舶租赁(03877) - 2025 - 中期财报

Company Profile The Group, established in June 2012, is the sole red-chip listed company under China State Shipbuilding Corporation, specializing in vessel and marine equipment leasing and investment operations Company Overview The Group, established in June 2012, is the sole red-chip listed company under China State Shipbuilding Corporation, focusing on vessel and marine equipment leasing and investment operations, with 143 vessels and HKD 42.2 billion in total assets as of June 30, 2025 - The Group is the sole red-chip listed company under China State Shipbuilding Corporation, a leading shipyard-affiliated leasing company in Greater China, and one of the world's leading vessel leasing enterprises[6] - The business model integrates vessel leasing and investment operations, with continuous efforts in the green and clean energy sector[8] Company Profile as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of Vessels | 143 vessels | | Total Assets | HKD 42.2 billion | - Strategic focus on "dual carbon" goals, serving national strategies such as "clean energy", "strong shipbuilding and maritime nation", and "Guangdong-Hong Kong-Macao Greater Bay Area construction"[8] Company Information This section provides fundamental company details, including board members, committee structures, registered office, auditors, and listing information, illustrating its governance and external partnerships Company Basic Information and Governance Structure This section lists the company's board members, committee compositions, company secretary, registered office, legal advisors, share registrar, auditor, principal bankers, company website, stock code, and listing date, showcasing its governance structure and external partners - Board members include executive directors, non-executive directors, and independent non-executive directors, with committees for audit, remuneration, nomination, strategy and investment, and ESG and sustainable development[11] - The company's registered office is located at Room 1801, 18/F, Worldwide House, 19 Des Voeux Road Central, Hong Kong[13] - The auditor is Grant Thornton Hong Kong Limited, and principal bankers include Bank of China (Hong Kong) Limited and China Construction Bank (Asia) Corporation Limited[13] Company Listing Information | Metric | Value | | :--- | :--- | | Stock Code | 3877 | | Listing Date | June 17, 2019 | Financial Summary This section provides a high-level overview of the Group's financial performance and position, including key figures from the income statement, statement of financial position, and selected financial ratios Condensed Consolidated Statement of Profit or Loss Summary For the six months ended June 30, 2025, the Group's revenue increased by 2.7% year-on-year to HKD 2.018 billion, and operating profit grew by 5.6% to HKD 1.167 billion, while profit for the period decreased by 14.1% to HKD 1.151 billion, with basic earnings per share at HKD 0.179, a 17.1% year-on-year decline Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,017,965 | 1,965,771 | 2.7% | | Total expenses | (833,297) | (1,095,844) | (24.0%) | | Operating profit | 1,167,050 | 1,105,081 | 5.6% | | Profit for the period | 1,151,157 | 1,339,860 | (14.1%) | | Earnings per share (HKD) – Basic | 0.179 | 0.216 | (17.1%) | | Earnings per share (HKD) – Diluted | 0.178 | 0.216 | (17.6%) | Condensed Consolidated Statement of Financial Position Summary As of June 30, 2025, the Group's total assets were HKD 42.201 billion, a 3.9% decrease from the end of 2024; total liabilities were HKD 27.496 billion, a 7.2% decrease; and total equity was HKD 14.704 billion, an increase of 2.8% Condensed Consolidated Statement of Financial Position Summary (As of June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Total assets | 42,200,612 | 43,920,995 | (3.9%) | | Total liabilities | 27,496,286 | 29,622,959 | (7.2%) | | Total equity | 14,704,326 | 14,298,036 | 2.8% | Selected Financial Ratios As of June 30, 2025, the Group's profitability metrics included an average return on assets (ROA) of 5.4% and an average return on equity (ROE) of 15.4%, while liquidity indicators showed a debt-to-asset ratio of 65.2% and a leverage ratio of 1.7 times, with S&P Global Ratings and Fitch Ratings both at A- Selected Financial Ratios (As of June 30) | Metric | 2025 H1 | 2024 H2 | | :--- | :--- | :--- | | Average Return on Assets (ROA) | 5.4% | 4.8% | | Average Return on Equity (ROE) | 15.4% | 15.7% | | Average Cost of Interest-Bearing Debt | 3.1% | 3.5% | | Net Interest Margin | 57.0% | 53.4% | | Debt-to-Asset Ratio | 65.2% | 67.5% | | Risk Assets to Equity Ratio | 2.8 times | 2.9 times | | Leverage Ratio | 1.7 times | 1.9 times | | Net Debt to Equity Ratio | 1.7 times | 1.8 times | | S&P Global Rating | A- | A | | Fitch Rating | A- | A | | Dagong Global Credit Rating | AAA | AAA | Management Discussion and Analysis This section provides an in-depth review of the Group's operational performance, financial position, and future outlook, covering industry trends, strategic initiatives, and risk management Industry Environment In H1 2025, the international shipping market experienced overall upward volatility, driven by the Red Sea crisis, commodity demand, and inventory replenishment in Europe and the US, while the oil tanker and product tanker markets saw slight increases, dry bulk freight rates fluctuated, container shipping rates rebounded after a decline, and LNG and VLGC freight rates remained relatively stable despite some weakness - In H1 2025, the Clarkson Shipping Index rose from USD 21,621/day in January to USD 25,453/day in June, an increase of 17.7%, but the average for the first half of the year decreased by 4.9% year-on-year[24] - The oil tanker market slowly increased, with the Baltic Dirty Tanker Index (BDTI) average for H1 decreasing by 21.3% year-on-year, while the product tanker market saw a slight increase, with the Baltic Clean Tanker Index (BCTI) average for H1 at 681 points[24][25] - Dry bulk freight rates fluctuated, with the Baltic Dry Index (BDI) average for H1 decreasing by 29.7% year-on-year, while the China Containerized Freight Index (CCFI) and Shanghai Containerized Freight Index (SCFI) averages for H1 decreased by 8.2% and 26.6% year-on-year, respectively[26][27] - LNG vessel freight rates were exceptionally weak, with the H1 average decreasing by 86.2% to 56.0%, while VLGC freight rates decreased by 27.4% year-on-year but remained at a relatively good level[28][29] - Looking ahead to H2, global seaborne trade volume and turnover growth are projected to be 0.1% and 0.3% respectively, with global fleet capacity expected to grow by 4.3%, potentially leading to a decline in earnings for most vessel types[32][33] - In terms of green initiatives, the IMO launched the world's first mandatory "dual-track" emission reduction agreement, with LNG and methanol fuels as short-term primary choices, and green ammonia and green hydrogen as long-term directions, while smart vessel technology made breakthroughs, with the Maritime Autonomous Surface Ships (MASS CODE) entering voluntary implementation and China Classification Society revising its "Smart Ship Rules"[35][36] H1 Work Summary In H1 2025, the Group adhered to its "counter-cyclical investment, pro-cyclical operation" strategy, achieving revenue of HKD 2.018 billion, a 2.7% year-on-year increase, and net profit of HKD 1.151 billion, a 14.1% year-on-year decrease, primarily due to increased tax expenses from the OECD Pillar Two Model Rules, with an annualized ROE of 15.4% and an annualized ROA of 5.4%, making progress in fleet management, capital management, and lean management, optimizing fleet structure, controlling financing costs, and gaining authoritative recognition in ESG 2025 H1 Key Financial Performance | Metric | Amount (HKD) | Year-on-year Change | | :--- | :--- | :--- | | Operating Revenue | HKD 2.018 billion | +2.7% | | Net Profit | HKD 1.151 billion | -14.1% | | Annualized ROE | 15.4% | -0.3 percentage points | | Annualized ROA | 5.4% | +0.6 percentage points | - The decrease in net profit was primarily due to the retrospective application of the OECD Pillar Two Model Rules, resulting in a tax expense provision of HKD 137.7 million[37] Fleet Size and Structure Optimization In H1 2025, the Group prudently deployed new vessels, signed 6 new shipbuilding orders totaling USD 308 million, with 100% being mid-to-high-end vessel types, resulting in a fleet of 143 vessels as of June 30, of which 121 are operational with an average age of approximately 4.13 years and an average remaining lease term of 7.64 years for leases over one year, indicating a trend towards a higher-value, younger fleet structure - Signed 6 new shipbuilding orders with a contract value of USD 308 million, with 100% being mid-to-high-end vessel types (including 4 MR tankers and 2 methanol dual-fuel MR tankers)[38] Fleet Overview as of June 30, 2025 | Metric | Value | | :--- | :--- | | Total Fleet Size | 143 vessels | | Operational Vessels | 121 vessels | | Vessels Under Construction | 22 vessels | | Average Age of Operational Vessels | Approx. 4.13 years | | Average Remaining Lease Term for Leases over One Year | 7.64 years | - The operational fleet composition includes approximately 14.7% marine clean energy equipment, 17.4% container vessels, 23.1% liquid cargo vessels, 23.1% dry bulk vessels, and 21.7% special purpose vessels[38] Capital Management and Debt Structure The Group implemented a cross-currency financing strategy, replacing some high-interest USD borrowings with lower-interest RMB and HKD borrowings, controlling the comprehensive financing cost at 3.1%, a 40 basis point reduction from the beginning of the year, resulting in a debt-to-asset ratio of 65.2% as of June 30, 2025, a 2.3 percentage point decrease from year-end, with interest-bearing borrowings of approximately HKD 25.55 billion, a 7.4% decrease, while actively advancing a RMB 10 billion credit facility agreement with CSSC Finance to ensure sufficient capital reserves - Comprehensive financing cost controlled at 3.1%, a 40 basis point reduction from the beginning of the year[39] Debt Structure as of June 30, 2025 | Metric | Amount (HKD) | Change from Year-end | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 65.2% | Down 2.3% | | Interest-Bearing Borrowings | Approx. HKD 25.55 billion | Down 7.4% | - Actively advancing the RMB 10 billion credit facility agreement with CSSC Finance to increase credit reserve limits[39] Lean Management and ESG Achievements The Group further improved its comprehensive risk management system, deepened compliance control, and achieved significant ESG accomplishments, successfully being selected for S&P Global's "Sustainability Yearbook (China Edition) 2025" and ranking on the "Fortune China ESG Impact List" for the third consecutive year, fully demonstrating authoritative recognition of its ESG governance effectiveness - Improved the comprehensive risk management system, re-evaluating, refining, and expanding first, second, and third-tier risks, and formulating optimization plans[40] - Deepened compliance control, incorporating consolidated joint ventures and contracts involving significant reserved matters into legal review[40] - Successfully selected for S&P Global's "Sustainability Yearbook (China Edition) 2025" and ranked on the "Fortune China ESG Impact List" for the third consecutive year[40] H2 Outlook In H2 2025, the company will maintain steady progress, focusing on expanding its vessel leasing business and securing new shipbuilding orders to grow its high-quality vessel asset portfolio, while also diligently managing asset risk disposal, strengthening vessel asset monitoring, and controlling comprehensive financing costs through measures such as establishing a USD 3 billion Medium Term Note framework program, advancing the RMB 10 billion credit agreement with CSSC Finance, and continuing cross-currency financing - Continue to expand vessel leasing business, secure new shipbuilding orders, and grow a high-quality vessel asset portfolio[42] - Diligently manage asset risk disposal, strengthen vessel asset monitoring, strictly control incremental risks, and prepare risk response plans in advance[42] - Strengthen comprehensive financing cost control, including completing the establishment of a USD 3 billion Medium Term Note framework program, advancing the implementation of the RMB 10 billion credit agreement with CSSC Finance, and continuously implementing cross-currency financing[42] Financial Review This section provides a detailed review of the Group's H1 2025 financial performance, including an analysis of the condensed consolidated statement of profit or loss and statement of financial position, noting revenue growth from operating lease services, decreased financial services income, significantly reduced total expenses due to lower financing costs and impairment reversals, and a decrease in profit for the period due to increased tax expenses from OECD Pillar Two rules and lower joint venture results, while the financial position showed decreased total assets and liabilities, increased total equity, and improved debt-to-asset ratio Analysis of Condensed Consolidated Statement of Profit or Loss In H1 2025, the Group's revenue increased by 2.7% year-on-year to HKD 2.018 billion, primarily driven by a 15.4% increase in operating lease service income, while total expenses decreased by 24.0% year-on-year, mainly due to a 19.3% reduction in finance costs and a net reversal of impairment losses on loans and lease receivables, but the share of results of joint ventures decreased by 50.2%, and income tax expense significantly increased to HKD 137.7 million due to the retrospective application of OECD Pillar Two rules, leading to a 14.1% year-on-year decrease in profit for the period to HKD 1.151 billion Revenue The Group's revenue increased by 2.7% year-on-year to HKD 2.018 billion, primarily driven by a 15.4% increase in operating lease service income to HKD 1.209 billion due to the addition of 3 container vessels in H2 2024, while financial services income decreased by 12.2% to HKD 787 million, mainly due to the completion of some finance lease and loan borrowing projects Revenue Breakdown by Business Activity (For the six months ended June 30) | Business Category | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Shipping Integrated Services | 1,231,338 | 1,069,465 | 15.1% | | －Operating Lease Services | 1,208,824 | 1,047,123 | 15.4% | | －Vessel Brokerage Services | 22,514 | 22,342 | 0.8% | | Financial Services | 786,627 | 896,306 | (12.2%) | | －Finance Lease Services | 549,995 | 619,906 | (11.3%) | | －Loan Borrowing Services | 236,632 | 276,400 | (14.4%) | | Total | 2,017,965 | 1,965,771 | 2.7% | - Operating lease service income increased by 15.4%, primarily due to the addition of 3 container vessels in H2 2024[47] - Financial services income decreased by 12.2%, primarily due to the completion of finance lease and loan borrowing projects during H2 2024 and H1 2025[48] Other Income and Other (Losses) / Gains, Net In H1 2025, the Group recorded a net other loss of HKD 17.6 million, primarily due to net exchange losses, whereas in the same period of 2024, it recorded a net other income of HKD 235.2 million, mainly from early termination fees for finance lease projects and gains on disposal of vessels - Net other loss for H1 2025 was HKD 17.6 million, primarily due to net exchange losses[49] - Net other income for the same period in 2024 was HKD 235.2 million, mainly from early termination fees of HKD 150.7 million for finance lease projects and gains of HKD 56.4 million from the disposal of vessels[49] Expenses The Group's total expenses decreased by 24.0% year-on-year to HKD 833 million, with finance costs and bank charges decreasing by 19.3% to HKD 416 million due to efficient financing strategies, while depreciation expenses increased by 6.1%, vessel operating costs increased by 37.8%, and employee benefit expenses decreased by 7.6%, notably recording a net reversal of impairment losses on loans and lease receivables of HKD 132 million compared to a net provision of HKD 106 million in the prior year Expense Breakdown (For the six months ended June 30) | Expense Category | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Finance costs and bank charges | 416,021 | 515,642 | (19.3%) | | Depreciation | 297,993 | 280,936 | 6.1% | | Vessel operating costs | 188,209 | 136,582 | 37.8% | | Employee benefit expenses | 28,669 | 31,022 | (7.6%) | | Other operating expenses | 34,728 | 25,998 | 33.6% | | Impairment (reversal) / provision for loans and lease receivables, net | (132,323) | 105,664 | (225.2%) | | Total | 833,297 | 1,095,844 | (24.0%) | - Finance costs and bank charges decreased by 19.3%, primarily due to cross-currency financing strategies, reduction of existing loan interest rates, and financial derivative hedging of interest rate risks[52][53][54] - Vessel operating costs increased by 37.8%, mainly due to increased vessel repair and maintenance costs in H1 2025[56] - Net reversal of impairment losses on loans and lease receivables of HKD 132.3 million was primarily due to the reversal of provisions recognized in prior years for lease projects upon completion or early termination[58] Share of Results of Joint Ventures The Group's share of results of joint ventures decreased by 50.2% year-on-year to HKD 131 million, mainly due to the disposal of 2 chemical MR tankers in H2 2024 and a decrease in daily charter rates for product and chemical tankers - Share of results of joint ventures decreased by 50.2% from HKD 264 million in H1 2024 to HKD 131 million in H1 2025[60] - The decrease was primarily due to the disposal of 2 chemical MR tankers in H2 2024 and a decline in daily charter rates for product and chemical tankers[60] Income Tax Expense Income tax expense significantly increased from HKD 20.2 million in H1 2024 to HKD 137.7 million in H1 2025, primarily due to the retrospective application of the OECD Pillar Two Model Rules (GloBE Rules) from January 1, 2025, requiring eligible multinational enterprises to pay taxes at a minimum effective tax rate of 15% - Income tax expense increased to HKD 137.7 million, primarily due to the retrospective application of the OECD Pillar Two Model Rules from January 1, 2025[61] - The GloBE Rules apply to large multinational enterprises with consolidated revenue exceeding EUR 750 million, requiring them to pay taxes at a minimum effective tax rate of 15%[61] Profit for the Period In H1 2025, the Group's profit for the period was HKD 1.151 billion, a 14.1% year-on-year decrease, primarily due to the combined impact of increased tax costs (due to OECD Pillar Two rules) and a 50.2% decrease in the share of results of joint ventures, despite core business operating profit remaining stable at HKD 1.013 billion (excluding non-recurring items) compared to HKD 1.004 billion in the prior year - Profit for the period was HKD 1,151.2 million, a 14.1% year-on-year decrease[62] - Core business operating profit remained stable, at HKD 1,013.1 million in H1 2025 compared to HKD 1,003.6 million in H1 2024[62] - The decrease in profit was primarily due to increased tax costs (due to OECD Pillar Two rules) and a 50.2% reduction in the share of results of joint ventures[63] Analysis of Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HKD 42.201 billion, a 3.9% decrease from the end of 2024, primarily due to a reduction in loans and lease receivables, while total liabilities decreased by 7.2% to HKD 27.496 billion, mainly due to the repayment of maturing USD bonds, and total equity increased by 2.8% to HKD 14.704 billion, improving the debt-to-asset ratio by 2.3 percentage points to 65.2% Condensed Consolidated Statement of Financial Position Summary (As of June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Total assets | 42,200,612 | 43,920,995 | (3.9%) | | Total liabilities | 27,496,286 | 29,622,959 | (7.2%) | | Total equity | 14,704,326 | 14,298,036 | 2.8% | | Debt-to-asset ratio | 65.2% | 67.5% | Down 2.3% | - The decrease in total assets was primarily due to a reduction in loans and lease receivables, as several lease projects were completed, with the proceeds used to repay borrowings[65] - The decrease in total liabilities was mainly due to the repayment of a maturing USD bond in H1 2025, which helped reduce interest-bearing debt and overall financial costs[65] Total Assets Composition As of June 30, 2025, the Group's total assets were HKD 42.201 billion, primarily comprising property, plant and equipment, loans and lease receivables, cash and bank deposits, and financial assets measured at fair value, accounting for 93.9% of total assets Total Assets Breakdown (As of June 30) | Asset Category | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Loans and lease receivables | 20,201,368 | 20,714,833 | (2.5%) | | Property, plant and equipment | 16,099,700 | 16,394,376 | (1.8%) | | Financial assets measured at fair value | 2,160,567 | 2,136,047 | 1.1% | | Cash and cash equivalents and time deposits maturing over three months | 1,179,872 | 1,909,346 | (38.2%) | | Other assets | 2,559,105 | 2,766,393 | (7.5%) | | Total | 42,200,612 | 43,920,995 | (3.9%) | Loans and Lease Receivables The Group's total loans and lease receivables amounted to HKD 20.201 billion, a 2.5% decrease from the end of 2024, with net lease receivables decreasing by 2.3% to HKD 14.002 billion, primarily due to the scheduled completion of some finance lease projects, and loan borrowings and loans to joint ventures also slightly decreased Loans and Lease Receivables Breakdown (As of June 30) | Category | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Lease receivables | 14,002,469 | 14,331,654 | (2.3%) | | Loan borrowings | 5,982,268 | 6,118,321 | (2.2%) | | Loans to joint ventures | 216,631 | 264,858 | (18.2%) | | Total | 20,201,368 | 20,714,833 | (2.5%) | - Lease receivables decreased by 2.3%, primarily due to the scheduled completion of some finance lease projects during the six months ended June 30, 2025[69] Property, Plant and Equipment The Group's total property, plant and equipment amounted to HKD 16.099 billion, a 1.8% decrease from the end of 2024, primarily due to the disposal of 2 dry bulk vessels in H2 2024 and depreciation from vessels in the leasing business - Property, plant and equipment decreased by 1.8%, primarily due to the disposal of 2 dry bulk vessels in H2 2024 and depreciation from vessels in the leasing business[72] Financial Assets Measured at Fair Value The Group's total financial assets measured at fair value amounted to HKD 2.161 billion, primarily comprising listed bonds and wealth management products, as the Group continuously optimizes its financial asset allocation to diversify portfolio risks and achieve stable returns - Total financial assets measured at fair value amounted to HKD 2,160.6 million, primarily referring to listed bonds and wealth management products held by the Group[73] - The Group continuously diversifies its investment portfolio risks and achieves stable returns by investing in various listed bonds and wealth management products[73] Total Liabilities Composition As of June 30, 2025, the Group's total liabilities were HKD 27.496 billion, primarily consisting of borrowings, which accounted for 92.9% of total liabilities, with bank borrowings increasing by 8.3% to HKD 13.889 billion, while bond borrowings decreased by 22.8% to HKD 10.370 billion, mainly due to the repayment of maturing USD bonds and the addition of low-cost bank loans Total Liabilities Breakdown (As of June 30) | Liability Category | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Borrowings – Bank borrowings | 13,889,083 | 12,829,276 | 8.3% | | Borrowings – Bonds | 10,369,790 | 13,432,257 | (22.8%) | | Borrowings – Other | 1,289,195 | 1,325,622 | (2.7%) | | Other liabilities | 1,948,218 | 2,035,804 | (4.3%) | | Total | 27,496,286 | 29,622,959 | (7.2%) | - Bank borrowings increased by 8.3%, primarily because the Group repaid the USD 400 million secured bond due in February 2025 on time and in full by adding low-cost bank loans[76] - Bond borrowings decreased by 22.8% due to the repayment of the USD 400 million secured bond due in February 2025, while the issuance of the RMB 3 billion "Panda Bond" framework in the domestic interbank market was completed[76][77] Asset Quality The Group did not write off any loans or lease receivables in H1 2025 or 2024, indicating stable asset quality - As of the year ended December 31, 2024, and the six months ended June 30, 2025, the Group did not write off any loans and lease receivables[78] Liquidity and Working Capital The Group funds its operations through cash generated from operating activities, bank borrowings, and bond issuances, maintaining a robust liquidity management strategy, with net cash generated from operating activities of HKD 1.320 billion in H1 2025, net cash generated from investing activities of HKD 287 million, and net cash used in financing activities of HKD 2.346 billion, ensuring sufficient funding sources to cover debt repayment and business development needs through good credit ratings - The Group primarily funds its operations and growth through cash generated from operating activities, bank borrowings, and bond issuances, maintaining a robust liquidity risk appetite[79] - Maintained an AAA rating from Dagong Global Credit Rating Co., Ltd., an A- international rating from S&P, and an A- international rating from Fitch (Fitch's rating change was due to Fitch's adjustment of China's sovereign credit rating during the period)[80] Condensed Consolidated Cash Flow Statement Summary (For the six months ended June 30) | Cash Flow Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,320,276 | 4,273,137 | | Net cash generated from / (used in) investing activities | 286,880 | (997,327) | | Net cash used in financing activities | (2,345,639) | (2,812,250) | | Net (decrease) / increase in cash and cash equivalents | (738,483) | 463,560 | | Cash and cash equivalents at end of period | 1,052,669 | 1,401,173 | - Net cash generated from operating activities was primarily due to the receipt of funds from completed finance lease projects and the generation of operating profit[82] - Net cash generated from investing activities was primarily due to the receipt of dividends from a joint venture[83] - Net cash used in financing activities was primarily due to the repayment of maturing bonds[83] Capital Management In H1 2025, the Group actively navigated a complex financial environment, effectively controlling financing costs through diversified financing channels and cross-currency financing strategies, and utilizing financial instruments to hedge interest rate and exchange rate risks, resulting in a comprehensive financing cost reduction to 3.1%, ample credit facilities, and a healthy debt-to-asset level Bank Loans and Capital Structure The Group effectively controlled financing costs by opportunistically utilizing RMB and HKD financing, reducing the comprehensive financing cost from 3.5% at the end of 2024 to 3.1% in H1 2025, and signed a RMB 10 billion credit facility agreement with CSSC Finance, further enhancing capital management efficiency, maintaining ample credit facilities and a leverage ratio of 1.7 times as of June 30, 2025, indicating a healthy debt-to-asset level - Comprehensive financing cost decreased from 3.5% for the year ended December 31, 2024, to 3.1% for the six months ended June 30, 2025[85] - Adopted "cross-currency" financing measures, utilizing low-interest RMB and HKD borrowings to effectively control the rapid growth of financing costs[85] - Signed a RMB 10 billion credit facility agreement with CSSC Finance, valid until December 31, 2027, significantly enhancing capital management efficiency[86] Loan Facilities and Leverage Ratio as of June 30, 2025 | Metric | Amount (HKD) | | :--- | :--- | | Total Loan Facilities | Approx. HKD 34.84 billion | | Utilized Loan Facilities | Approx. HKD 15.18 billion | | Unutilized Bank Loan Facilities | Approx. HKD 19.66 billion | | Leverage Ratio | 1.7 times | Interest Rate Risk The Group hedges interest rate risk exposure by employing financial instruments such as interest rate swaps, with existing interest rate swap products having a notional principal of approximately HKD 3.338 billion as of June 30, 2025, locking in an average long-term fixed USD interest rate of approximately 1.58%, effectively hedging against the impact of high USD interest rates, while also improving the matching of interest-bearing methods for assets and liabilities through fixed-rate bonds and loans to reduce interest rate risk exposure - Employed financial instruments such as interest rate swaps to hedge interest rate risk exposure, with existing interest rate swap products having a notional principal of approximately HKD 3,338.0 million as of June 30, 2025[88] - The locked-in average long-term fixed USD interest rate is approximately 1.58%, effectively hedging against the negative impact of high USD interest rates[88] - Continuously improved the matching of interest-bearing methods for operating lease assets and liabilities through measures such as issuing fixed-rate bonds, fixed-rate loans, and operating interest rate swaps[88] Exchange Rate Risk The Group adopts a prudent foreign exchange risk management strategy, as vessel purchases and lease receivables are primarily denominated in USD, and the main funding source is USD bank loans, thus presenting no significant exchange rate risk exposure, while for RMB exchange rate risk exposure, the Group hedges through foreign exchange swaps, cross-currency swaps, and replacing RMB financing with HKD financing, maintaining exchange rate risk at a controllable level during the period - Vessels under finance lease and operating lease businesses are purchased in USD, and corresponding finance lease receivables and fixed assets are denominated in USD, with the main funding source being USD bank loans, thus presenting no significant exchange rate risk exposure[89] - For existing RMB exchange rate risk exposure, the Group effectively hedges foreign exchange risk exposure by partially engaging in financial activities such as foreign exchange swaps and cross-currency swaps, and partially utilizing HKD financing to replace RMB financing[89] Risk Management The Group has established a comprehensive risk management system, adopting a prudent risk appetite strategy that favors industries with mature business models, economies of scale, and excellent asset quality, as well as large, leading, or high-quality listed company clients, and by scientifically classifying, valuing, and professionally managing lease assets, while continuously improving its risk management system, processes, and tools, it has effectively enhanced its risk management capabilities to maximize risk-adjusted returns - The Group's strategic objective is sustainable business development and enhancing Group value, establishing a comprehensive risk management system and adopting a prudent risk appetite strategy[90] - In terms of industry selection, the Group prefers industries and sectors with mature business models, economies of scale, and excellent asset quality; in terms of client selection, it prefers large enterprises, industry leaders, or high-quality listed companies[90] - In H1 2025, the company further improved its risk management system, processes and tools, risk management, internal control, compliance standardization, and risk management informatization, effectively enhancing its risk management capabilities[91] Human Resources As of June 30, 2025, the Group had 79 employees, a decrease of 5 from the prior year, with approximately 31.6% located in Hong Kong and approximately 94.9% holding a bachelor's degree or higher, while employee benefit expenses were HKD 28.7 million, a 7.6% year-on-year decrease, as the Group is committed to providing a competitive and fair remuneration and benefits system Human Resources Overview (As of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Employees | 79 employees | 84 employees | | Proportion of Employees with Bachelor's Degree or Above | Approx. 94.9% | - | | Employee Benefit Expenses (thousand HKD) | 28,669 | 31,022 | - Employee benefit expenses decreased by 7.6%, primarily due to a reduction in the Group's total number of employees[92] Asset Pledges As of June 30, 2025, approximately HKD 9.282 billion in loans and lease receivables, HKD 242 million in floating charge deposits, and HKD 2.817 billion in property, plant and equipment were pledged to banks to secure bank loans Pledged Assets Overview (As of June 30) | Pledged Asset Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Loans and lease receivables | 9,281,800 | 9,620,900 | | Floating charge deposits | 242,100 | 253,000 | | Property, plant and equipment | 2,817,300 | 2,870,900 | - Shares of certain subsidiaries, overall assignments, bareboat charterer assignments, and inter-group loan assignments have also been pledged to banks[93] Corporate Governance / Other Information This section details the Group's corporate governance practices, interim dividend declaration, share registration arrangements, directors' securities dealings, changes in directors' information, and major shareholder interests Corporate Governance Practices The Group is committed to maintaining high standards of corporate governance, complying with the Corporate Governance Code set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules, and despite the Chairman and CEO being the same person, the Board believes this arrangement facilitates business strategy execution and operational efficiency, with a balanced board structure that safeguards shareholder interests - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and complied with all applicable code provisions in H1 2025[95] - Mr. Li Hongtao serves as both Chairman and Chief Executive Officer, an arrangement the Board believes facilitates business strategy execution and enhances operational efficiency[96] Interim Dividend The Board declared an interim dividend of HKD 0.05 per share for the six months ended June 30, 2025, an increase from HKD 0.03 per share in the same period of 2024, payable on November 13, 2025, with shareholders having the option to receive it in HKD or RMB - The Board declared an interim dividend of HKD 0.05 per share for the six months ended June 30, 2025 (H1 2024: HKD 0.03 per share)[97] - The interim dividend will be paid on November 13, 2025, and shareholders may elect to receive it in HKD or RMB[97] Closure of Register of Members To determine eligibility for the interim dividend, the company will suspend its share transfer registration from October 2 to October 6, 2025 (both dates inclusive), with the ex-dividend date for the interim dividend being September 29, 2025, and the record date being October 6, 2025 - The register of members will be closed from Thursday, October 2, 2025, to Monday, October 6, 2025[99] - The ex-dividend date for the interim dividend is Monday, September 29, 2025, and the record date is Monday, October 6, 2025[99] Standard Code for Securities Transactions by Directors The company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors confirmed compliance with this Standard Code during the six months ended June 30, 2025 - The company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code in H1 2025[100] Changes in Directors' Information Ms. Zhang Yi resigned as a non-executive director and a member of the company's Audit Committee and Strategy and Investment Committee on June 23, 2025, due to personal work arrangements, with no other changes in directors' information requiring disclosure under the Listing Rules during the six months ended June 30, 2025 - Ms. Zhang Yi resigned as a non-executive director and a member of the company's Audit Committee and Strategy and Investment Committee on June 23, 2025, due to personal work arrangements[101] Purchase, Sale or Redemption of the Company's Listed Securities During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - In H1 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[102] - As of June 30, 2025, the company held no treasury shares[102] Interim Results Review The company's Audit Committee, in conjunction with senior management and external auditors, reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, to monitor the financial reporting system, risk management, and internal control systems - The Audit Committee, in conjunction with the company's senior management and external auditors, reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025[103] Directors' and Chief Executive's Interests As of June 30, 2025, no directors or chief executives of the company held any interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation that were required to be disclosed to the company and the Stock Exchange under the Securities and Futures Ordinance - As of June 30, 2025, no directors or chief executives of the company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation[104] Substantial Shareholders' Interests As of June 30, 2025, the State-owned Assets Supervision and Administration Commission of the State Council, China State Shipbuilding Corporation, and CSSC International Holdings Company Limited each held approximately 74.25% long positions in the company's shares, while Central Huijin Investment Ltd., China Re Asset Management (Hong Kong) Company Limited, and China Reinsurance (Group) Corporation held approximately 8.07% long positions Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares (As of June 30, 2025) | Shareholder Name | Capacity / Nature of Interest | Number of Shares | Long / Short Position | Approximate Percentage of Company's Shareholding (%) | | :--- | :--- | :--- | :--- | :--- | | State-owned Assets Supervision and Administration Commission of the State Council | Interest in controlled corporation | 4,602,046,234 | Long Position | 74.25 | | China State Shipbuilding Corporation | Interest in controlled corporation | 4,602,046,234 | Long Position | 74.25 | | China State Shipbuilding Corporation Limited | Interest in controlled corporation | 4,602,046,234 | Long Position | 74.25 | | CSSC International Holdings Company Limited | Beneficial owner | 4,602,046,234 | Long Position | 74.25 | | Central Huijin Investment Ltd. | Interest in controlled corporation | 500,246,000 | Long Position | 8.07 | | China Re Asset Management (Hong Kong) Company Limited | Investment manager | 500,246,000 | Long Position | 8.07 | | China Reinsurance (Group) Corporation | Beneficial owner | 500,246,000 | Long Position | 8.07 | Share Option Scheme The company's share option scheme was approved on April 30, 2021, with a 10-year validity, and as of the reporting date, 172,250,000 share options have been granted, with 26,808 thousand outstanding share options as of June 30, 2025, at a weighted average exercise price of HKD 1.26, and the number of ordinary shares issued increased by 11,476 thousand during the period due to the exercise of share options - The share option scheme was approved by shareholders on April 30, 2021, with a validity period of 10 years[107] - As of the reporting date, the company has granted 172,250,000 share options under the scheme[108] Share Option Movement Details (For the six months ended June 30) | Metric | 2025 (thousand shares) | 2024 (thousand shares) | | :--- | :--- | :--- | | Outstanding at January 1 | 58,941 | 115,368 | | Exercised | (11,476) | (16,206) | | Forfeited | (20,657) | (5,366) | | Outstanding at June 30 | 26,808 | 93,796 | | Exercisable at June 30 | 9,232 | 48,359 | - As of June 30, 2025, the weighted average remaining contractual life of outstanding share options was 6.2 years, with exercise prices ranging from HKD 1.15 to HKD 1.32[180] Directors' Rights to Acquire Shares or Debentures During the six months ended June 30, 2025, neither the company nor any of its subsidiaries entered into any arrangements enabling directors to acquire benefits by purchasing shares or debentures of the company or any other body corporate, nor were any such rights granted to or exercised by any director or their family members - In H1 2025, neither the company nor any of its subsidiaries entered into any arrangements enabling directors to acquire benefits by purchasing shares or debentures of the company or any other body corporate[114] Disclosure Pursuant to Rule 13.21 of the Listing Rules The company entered into a liquidity loan agreement with a bank for a maximum of RMB 800 million over a 12-month term, with the condition that China State Shipbuilding Corporation must maintain its status as an enterprise directly managed by the State-owned Assets Supervision and Administration Commission of the State Council and remain the controlling shareholder of the company - The company entered into a liquidity loan agreement with a bank for a maximum loan amount of RMB 800 million with a 12-month term[115] - The loan condition requires China State Shipbuilding Corporation to maintain its status as an enterprise directly managed by the State-owned Assets Supervision and Administration Commission of the State Council and remain the controlling shareholder of the company[115] Independent Review Report This section presents the independent review report on the Group's condensed consolidated interim financial information, confirming its preparation in accordance with relevant accounting standards Independent Review Report Grant Thornton Hong Kong Limited conducted a review of China CSSC (Hong Kong) Shipping Company Limited's condensed consolidated interim financial information for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, concluding that no matters came to the auditor's attention that caused them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" - Grant Thornton Hong Kong Limited reviewed the Group's condensed consolidated interim financial information as of June 30, 2025[118] - The scope of the review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, thus no audit opinion is expressed[119] - The conclusion is that nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[120] Condensed Consolidated Statement of Profit or Loss This section presents the Group's unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, showing revenue of HKD 2.018 billion and operating profit of HKD 1.167 billion, but with profit for the period decreasing to HKD 1.151 billion due to a significant increase in income tax expense, resulting in basic earnings per share of HKD 0.179 Condensed Consolidated Statement of Profit or Loss This section presents the Group's unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, showing revenue of HKD 2.018 billion and operating profit of HKD 1.167 billion, but with profit for the period decreasing to HKD 1.151 billion due to a significant increase in income tax expense, resulting in basic earnings per share of HKD 0.179 Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 2,017,965 | 1,965,771 | | Other income and other (losses) / gains, net | (17,618) | 235,154 | | Total expenses | (833,297) | (1,095,844) | | Operating profit | 1,167,050 | 1,105,081 | | Share of results of joint ventures | 131,328 | 263,789 | | Income tax expense | (137,730) | (20,161) | | Profit for the period | 1,151,157 | 1,339,860 | | Basic earnings per share (HKD) | 0.179 | 0.216 | Condensed Consolidated Statement of Comprehensive Income This section presents the Group's condensed consolidated statement of comprehensive income, detailing profit for the period and other comprehensive income/expenses Condensed Consolidated Statement of Comprehensive Income This section presents the Group's unaudited condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, with profit for the period at HKD 1.151 billion and net other comprehensive expenses at HKD 97.74 million, resulting in total comprehensive income for the period of HKD 1.053 billion, a decrease from the prior year Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Profit for the period | 1,151,157 | 1,339,860 | | Total other comprehensive (expenses) / income for the period | (97,737) | 28,212 | | Total comprehensive income for the period | 1,053,420 | 1,368,072 | | Attributable to owners of the Company | 1,007,830 | 1,355,421 | | Attributable to non-controlling interests | 45,590 | 12,651 | Condensed Consolidated Statement of Financial Position This section presents the Group's condensed consolidated statement of financial position, outlining its assets, liabilities, and equity as of the reporting date Condensed Consolidated Statement of Financial Position This section presents the Group's unaudited condensed consolidated statement of financial position as of June 30, 2025, with total assets of HKD 42.201 billion, total liabilities of HKD 27.496 billion, and total equity of HKD 14.704 billion, where the asset structure primarily includes loans and lease receivables, property, plant and equipment, and liabilities are mainly borrowings Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Assets | | | | Property, plant and equipment | 16,099,700 | 16,394,376 | | Loans and lease receivables | 20,201,368 | 20,714,833 | | Cash and cash equivalents | 1,052,669 | 1,773,896 | | Total assets | 42,200,612 | 43,920,995 | | Liabilities | | | | Borrowings | 25,548,068 | 27,587,155 | | Total liabilities | 27,496,286 | 29,622,959 | | Equity | | | | Total equity | 14,704,326 | 14,298,036 | Condensed Consolidated Statement of Changes in Equity This section presents the Group's condensed consolidated statement of changes in equity, illustrating the movements in equity components over the reporting period Condensed Consolidated Statement of Changes in Equity This section presents the Group's unaudited condensed consolidated statement of changes in equity for the six months ended June 30, 2025, showing an increase in total equity from HKD 14.298 billion at the beginning of the period to HKD 14.704 billion at the end, primarily reflecting the impact of profit for the period, other comprehensive income, and transactions with equity holders such as share option issuance and dividend payments Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | At beginning of period | 14,298,036 | 12,829,911 | | Total comprehensive income for the period | 1,053,420 | 1,368,072 | | Shares issued under share option scheme | 14,701 | 20,629 | | Dividends | (644,630) | (553,778) | | At end of period | 14,704,326 | 13,666,747 | Condensed Consolidated Statement of Cash Flows This section presents the Group's condensed consolidated statement of cash flows, detailing cash movements from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows This section presents the Group's unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, with net cash generated from operating activities of HKD 1.320 billion, net cash generated from investing activities of HKD 287 million, and net cash used in financing activities of HKD 2.346 billion, resulting in cash and cash equivalents of HKD 1.053 billion at the end of the period Condensed Consolidated Cash Flow Statement (For the six months ended June 30) | Cash Flow Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,320,276 | 4,273,137 | | Net cash generated from / (used in) investing activities | 286,880 | (997,327) | | Net cash used in financing activities | (2,345,639) | (2,812,250) | | Net (decrease) / increase in cash and cash equivalents | (738,483) | 463,560 | | Cash and cash equivalents at end of period | 1,052,669 | 1,401,173 | Notes to the Condensed Consolidated Interim Financial Information This section provides detailed explanatory notes to the condensed consolidated interim financial information, covering general information, accounting policies, fair value estimates, and other significant financial disclosures General Information This note provides basic information about China CSSC (Hong Kong) Shipping Company Limited, including its registration in Hong Kong and its primary engagement in shipping integrated services and financial services, with this interim financial information presented in HKD and approved for publication by the Board of Directors on August 28, 2025 - The company is a limited company incorporated in Hong Kong, primarily engaged in providing shipping integrated services and financial services[132] - This interim financial information is presented in HKD and was approved for publication by the company's Board of Directors on August 28, 2025[133] Basis of Preparation This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules, and while unaudited, it has been reviewed by Grant Thornton Hong Kong Limited - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[134] - The interim financial information is unaudited but has been reviewed by Grant Thornton Hong Kong Limited in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[134] Adoption of Revised HKFRSs The accounting policies in this interim financial information are consistent with those applied in the 2024 annual consolidated financial statements, except for the adoption of the revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" effective January 1, 2025, which had no significant impact on the Group's interim financial information - The interim financial information is prepared in accordance with the accounting policies adopted in the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of the revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" effective January 1, 2025[135] - The adoption of these revisions had no significant impact on the Group's interim financial information[136] Fair Value Estimation This note details the Group's fair value estimation for financial assets and liabilities, categorized into Level 1, Level 2, and Level 3, with total financial assets amounting to HKD 2.460 billion and total financial liabilities to HKD 146 million as of June 30, 2025, noting no transfers between levels during the period and that the carrying amounts of short-term financial assets and liabilities approximate their fair values Financial Assets and Financial Liabilities Measured at Fair Value (As of June 30) | Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Total financial assets | 2,459,676 | 2,540,912 | | Total financial liabilities | 145,561 | 195,801 | - Fair value hierarchy is divided into Level 1 (quoted prices in active markets), Level 2 (valuation based on observable market data), and Level 3 (valuation based on unobservable market data)[140] - There were no transfers between Level 1, Level 2, and Level 3 during the six months ended June 30, 2025[139] Critical Accounting Estimates and Judgements This note states that the significant judgments made by management and key sources of estimation uncertainty in preparing the interim financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2024 - The significant judgments made by management and key sources of estimation uncertainty in applying the Group's accounting policies when preparing the interim financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[141] Segment Information and Revenue The Group's chief operating decision maker categorizes its business into "Shipping Integrated Services" (including operating lease services and vessel brokerage services) and "Financial Services" (including finance lease services and loan borrowing services), with Shipping Integrated Services revenue of HKD 1.231 billion and Financial Services revenue of HKD 787 million for the six months ended June 30, 2025, and segment assets and liabilities are not presented - The chief operating decision maker has been identified as the executive directors of the company, and the business is divided into shipping integrated services and financial services[142] Revenue Breakdown by Business Activity (For the six months ended June 30) | Business Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Shipping Integrated Services | 1,231,338 | 1,069,465 | | Financial Services | 786,627 | 896,306 | | Total | 2,017,965 | 1,965,771 | - Segment assets and liabilities are not presented because the Group's segment reports submitted to the chief operating decision maker for internal review do not contain assets and liabilities[147] Finance Costs and Bank Charges For the six months ended June 30, 2025, the Group's finance costs and bank charges were HKD 416 million, a 19.3% decrease from HKD 516 million in the prior year, primarily comprising bond interest and fees, bank loan interest and fees, and other related charges Finance Costs and Bank Charges Breakdown (For the six months ended June 30) | Expense Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Bond interest and fees | 145,577 | 167,770 |