Report Summary 1. Core View - The shipping capacity in July and August 2025 shows different levels, with weekly average capacities of 295,000 and 313,000 TEU respectively. The cargo volume is entering a downward period, which is expected to put significant pressure on subsequent freight rates. The recent quotes of European routes have decreased, and the quotes of shipping companies in late July are generally stable [1]. 2. Key Data Futures Contracts | Contract | Closing Price | Change (%) | Base Price | Trading Volume | Open Interest | Open Interest Change | | ---- | ---- | ---- | ---- | ---- | ---- | ---- | | EC2508 | 2022.5 | 0.50 | 235.5 | 34566 | 30842 | -403 | | EC2510 | 2022.5 | 0.80 | 235.5 | - | - | - | | EC2512 | 1556.4 | 0.17 | 701.6 | 1644 | 6032 | - | | EC2602 | 1365.7 | 0.91 | 892.3 | 416 | 3799 | 24 | | EC2604 | 1204.0 | 1.11 | 1054.0 | 088 | - | 28 | | EC2606 | 1342.1 | 0.72 | 915.9 | 109 | 471 | 41 | [1] Spot Indices | Index | Update Frequency | Announcement Date | Unit | Current Period | Previous Period | Two Periods Ago | Current Change | Previous Change | | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | | Terdar | Electric Appliance | 2025/7/7 | Yuan | 2258.04 | 2123.24 | 1937.14 | 6.35% | 9.61% | | SCFI (European Route) | Weekly | 2025/7/4 | USD/TEU | 2101 | 2030 | 1832 | 3.50% | 10.63% | | CCFI (European Route) | Weekly | 2025/7/4 | Points | 1694.3 | 1640.72 | 1578.6 | 3.27% | 3.94% | | NCFI (European Route) | Weekly | 2025/7/4 | Points | 1442.46 | 1442.95 | 1299.58 | -0.03% | 11.03% | | TCI | Daily | 2025/7/9 | - | 1019.55 | 1019.55 | 1019.55 | 0.00% | 0.00% | [1] Freight Rates - The freight rates in the first half of July were around $3380 (equivalent to 2350 points on the futures market). The quotes of shipping companies in late July are generally stable, with the current quote range between $2900 - $3500, and the average is $3400 (equivalent to 2400 points on the futures market) [1][2] 3. Market News - On July 11, Israeli senior officials stated that a cease - fire agreement in Gaza might be reached in one or two weeks. Israel will offer a temporary cease - fire, and if Hamas does not lay down its arms, Israel will continue military operations. Houthi armed leaders said that as long as Israel continues its "aggression" in Gaza, their maritime operations against ships will continue. The Houthi armed forces claimed to have launched 45 attacks on Israeli - related targets in the past week [3] 4. Shipping Capacity and Quote Changes - The shipping capacity in the third week of July is relatively high at 320,000 TEU, and the fourth - week capacity is 290,000 TEU. The capacity in the first week of August reaches 340,000 TEU. Recently, the quotes of European routes have decreased. On Thursday, MSC's offline quote dropped from $3440 to $3140, and HPL's online quote dropped from $3535 to $3335 [1]

Core Insights - The shipping market is experiencing fluctuations, with Maersk maintaining stable pricing on European routes, raising questions about the sustainability of this upward trend [1] - Institutions indicate that an increase in supply in the second half of the year will exacerbate supply-demand conflicts, putting pressure on freight rates [1] - It is anticipated that freight rates on European routes will decline in the third quarter [1]

Investment Rating - The report maintains a "Strong Buy" rating for the company [2][4]. Core Views - The company is expected to benefit from the easing of tariff policies, which may enhance profitability in the pulp shipping market [2]. - The company's performance in 2024 is projected to be at the upper limit of previous forecasts, with a significant increase in gross profit driven by rising shipping rates and increased automotive transport volumes [2][3]. - The company anticipates steady growth in its mechanical equipment and automotive transportation segments, supported by favorable trade relations [2]. Financial Performance Summary - The company reported a net profit of 1.53 billion yuan for 2024, representing a year-on-year increase of 44% [2][3]. - For Q1 2025, the net profit was 350 million yuan, showing a slight increase of 1.6% year-on-year [2]. - The gross profit for 2024 is expected to reach 3.66 billion yuan, a 73% increase year-on-year, with a gross margin of 21.8%, up by 4.2 percentage points [2][3]. Segment Performance Summary - The multi-purpose and heavy-lift vessels generated a combined gross profit of 1.37 billion yuan in 2024, a 91% increase year-on-year, driven by strong demand in advanced manufacturing exports [2]. - The gross profit from pulp and automotive vessels reached 1.26 billion yuan, a 255% increase year-on-year, with automotive shipments increasing by 46% [2]. - The semi-submersible vessels reported a gross profit of 490 million yuan, a decrease of 7% year-on-year, primarily due to delayed contracts [2]. Future Profitability Outlook - The company expects profits of 1.88 billion yuan, 2.28 billion yuan, and 2.48 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 23%, 22%, and 9% [2][3]. - The estimated PE ratio for 2025 is projected to be 9.3x, indicating favorable growth potential [2][3].