Ge Long Hui A P P·2025-12-11 06:17Core Viewpoint - The report from Caitong Securities highlights that China Merchants Energy Shipping Company is a global leader in comprehensive shipping, with a high proportion of oil and bulk carriers, and has established a resilient shipping platform through mergers and acquisitions, reducing risks associated with single business cycles [1] Group 1: Company Overview - China Merchants Energy Shipping Company has built a comprehensive shipping business structure focusing on oil and gas bulk carriers, which mitigates risks from strong cyclical operations [1] - The company primarily operates with self-owned vessels, accounting for 91.5% of its fleet [1] Group 2: Fleet and Market Position - As of June 2025, the company will have 52 VLCCs and 37 VLOCs (including 3 managed vessels), ranking first globally in both categories [1] - The company also operates 19 Capesize vessels, including 3 on lease [1] Group 3: Market Dynamics - The current market is in a favorable cycle, with the company's VLCCs benefiting from scale and operational advantages, leading to superior profit elasticity [1] - Demand is supported by an expansion cycle and tightening sanctions in Europe and the U.S., while supply-side constraints exist due to insufficient new VLCC orders (10.6% of current orders) to replace aging vessels (20% are 21 years or older) [1] - The dynamic scrapping of older vessels and absorption into the gray market may limit the net increase in compliant effective capacity, suggesting sustained market conditions [1] Group 4: Investment Rating - The company is expected to benefit from a resonance in oil and bulk shipping markets, leading to an initial coverage rating of "Buy" [1]