Core Viewpoint - The recent reduction of tariffs between China and the U.S. has led to a surge in shipping demand, particularly on the U.S. routes, resulting in significant increases in freight rates and a near-complete booking of shipping slots by the end of May [1][2][3]. Shipping Demand and Freight Rates - Since the issuance of the joint statement on May 12, there has been a dramatic increase in shipping demand, with booking volumes for U.S. routes rising by 53% from May 14 to May 21, compared to the previous week [2]. - By the end of May, freight rates for the U.S. West Coast reached approximately $3,500 per FEU, while rates for the East Coast were around $5,000 per FEU, marking increases of $1,000 per FEU from earlier in the month [3]. - The Shanghai Shipping Exchange reported that as of May 23, freight rates for exports to the U.S. West and East coasts had increased by approximately 40% and 30%, respectively, compared to rates from May 9 [3][4]. Global Shipping Impact - The surge in U.S. shipping rates has also influenced global shipping rates, with the rate for exports to Europe increasing by 14.1% as of May 23 [4]. Supply and Demand Dynamics - The shipping industry anticipates that freight rates will continue to rise due to a shortage of shipping capacity, with projections indicating potential increases of over $1,000 per FEU in June [6]. - Despite the expectation of rising rates, some freight forwarders believe that increased shipping capacity in June may lead to a stabilization or decrease in rates [7]. Cautious Approach from Exporters - Exporters are adopting a cautious stance towards new orders due to uncertainties surrounding tariffs and shipping capacity, with many preferring to wait until they can better predict costs and delivery times [8]. - The long shipping cycles, particularly for the East Coast, which can take up to 85 days, further complicate the situation for exporters [8].

Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential return of over 20% within the next six months [5][15]. Core Views - The company's Q1 performance showed significant growth, with revenue reaching 58 billion yuan, a 20% year-on-year increase, and net profit of 11.7 billion yuan, up 73% year-on-year, primarily driven by the container shipping business [1]. - The increase in container shipping revenue is attributed to rising freight rates, with a 12% year-on-year increase in revenue per container on international routes [1]. - The impact of U.S. tariffs is expected to suppress freight demand and affect pricing, with a noted 7% decline in the China Container Freight Index (CCFI) in April [1][2]. - The company is adjusting its capacity in response to declining demand, with an estimated 18% of capacity expected to be idle in May [2]. - The terminal business showed resilience, with Q1 revenue of 2.8 billion yuan, a 16.1% increase, supported by stable foreign trade performance in China [3]. Financial Summary - The company has revised its profit forecasts upward for 2025-2026, projecting net profits of 27.7 billion yuan and 20.3 billion yuan respectively, compared to previous estimates of 20.9 billion yuan and 13.7 billion yuan [4]. - Key financial metrics include: - Revenue for 2025E is projected at 200.36 billion yuan, with a growth rate of -14.32% [4]. - Net profit for 2025E is estimated at 27.7 billion yuan, reflecting a decrease of 43.58% [4]. - Earnings per share (EPS) for 2025E is expected to be 1.77 yuan [4]. - The company maintains a healthy balance sheet with a debt-to-equity ratio of 41.97% and a current price of 14.36 yuan per share [5].