Investment Rating - The report maintains an "Overweight" rating for China Merchants Energy Shipping Company (01138) H-shares, with a target price of HKD 24 [1] Core Insights - The report discusses how recent events in Iran are reshaping the tanker and natural gas transportation markets, with over 90 investors participating in the expert conference [1] - The company is expected to sustain six-figure freight earnings, supported by tightening fleet supply, which is likely to continue driving profitability [1] - The long-term charter market indicates that tanker earnings may remain structurally high over the next 12 months, despite a potential slowdown in spot rates [1] Market Dynamics - Safety concerns have led vessels originally scheduled to load in the Persian Gulf to avoid the area, tightening the effective tanker fleet supply [1] - There is a significant potential increase in demand for alternative crude oil transportation from regions like the U.S. Gulf of Mexico to Asia, which requires more vessels compared to the Persian Gulf [1] - Even with an immediate ceasefire, restoring normal shipping traffic through the Strait of Hormuz will take time due to the need for shipowners, insurers, and charterers to rebuild confidence [1] Freight Rates - Current daily costs for Very Large Crude Carriers (VLCC) range from USD 110,000 to USD 140,000 [1] - For transporting 1 million barrels of oil equivalent, vessels from the U.S. Gulf to Asia require over four times the number of vessels compared to those from the Persian Gulf [1] - The tightening market has also affected other vessel types, with daily costs for Aframax and Suezmax vessels rising to approximately USD 280,000 and over USD 450,000, respectively [1] - Even if geopolitical tensions ease, normal shipping through the Strait of Hormuz may take several weeks to potentially two to three months to resume [1]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Short - term geopolitical sentiment will dominate the 04 contract's trading, with significant external capital impact. Next week (week 12) is the actual booking window, and the supply - demand situation is weak. It is recommended to observe cargo - booking conditions. Due to large price fluctuations, it is advisable to focus on right - side short - selling opportunities [3][23] 3. Summary According to Relevant Catalogs Contract Information - **Contract Prices and Changes**: EC2604 closed at 1768.0 with a - 7.41% change; EC2605 at 1805.0 with a - 14.48% change; EC2606 at 1950.1 with a - 12.51% change; EC2607 at 2066.4 with a - 12.07% change; EC2608 at 2010.0 with a - 10.31% change; EC2609 at 1498.3 with a - 11.01% change; EC2610 at 1394.9 with a - 7.25% change; EC2612 at 1677.3 with a - 9.96% change [2][22] - **Contract Volumes and Positions**: EC2604 had a trading volume of 153840 and a position of 36679 with a change of - 1939; EC2605 had a volume of 6155 and a position of 1782 with a change of - 12; EC2606 had a volume of 30528 and a position of 20170 with a change of - 1467; EC2607 had a volume of 1091 and a position of 771 with a change of 72; EC2608 had a volume of 4342 and a position of 2964 with a change of - 113; EC2609 had a volume of 768 and a position of 477 with a change of - 102; EC2610 had a volume of 12355 and a position of 11408 with a change of - 611; EC2612 had a volume of 430 and a position of 354 with a change of - 109 [2][22] - **Contract Month - spreads**: EC2604 - 2606 was - 182.1 with a daily change of 137.3 and a weekly change of 223.1; EC2604 - 2605 was - 37 with a daily change of 164.1 and a weekly change of - 180.7; EC2606 - 2610 was 555.2 with a daily change of - 169.7 and a weekly change of 86.6 [2][22] Spot Market Information - **European Line Spot Situation**: In early March, MSC led a price increase to $3000, and most other shipping companies followed, raising prices to $3000 - 3100. In week 10, MSK, MSC, and YML maintained prices, OOCL increased by $100, and ONE and HMM increased by $200, with an average of $2200, equivalent to about 1560 points. In week 11, MSK opened at $1850 (a $100 decrease), and other companies mainly maintained prices, with YML offering two special - price ships at $1800. In week 12, MSK opened at $2250 (a $400 increase) [4][24][25] - **Spot Price Index**: The European line spot price on March 2, 2026, was 1463.40, a - 7.00% change from the previous period and a - 2.10% change from two periods ago. The SCFI on February 27, 2026, was $1420 per TEU [2][22] News and Related Information - **Shipping - related News**: On March 5, major global seafarers' unions declared the Middle East Gulf region, including the Strait of Hormuz, a war - action area, and seafarers were given the right to refuse to go there. Iranian officials made statements about not asking for a cease - fire, being ready to respond to a US ground invasion, being willing to abandon the nuclear program under certain conditions, and keeping the Strait of Hormuz closed during the war [6][26] - **Price Increase Announcements**: In mid - March, MSC announced a price increase to $3200 for weeks 12 - 13 and $4000 for week 12. On March 3, HPL and CMA raised their online quotes to $4193 and $3135 respectively. On March 5, YML's offline quote for the second half of the month was $4000 [5][25]