Core Viewpoint - The article highlights a differentiated growth pattern in the medium-term economic landscape, with strong performance in emerging technologies and tight supply-demand dynamics in lithium battery materials, while consumer goods and travel sectors show marginal improvement, and real estate and durable goods demand remain under pressure [1]. Group 1: Downstream Consumption - Essential consumption shows marginal recovery, with retail sales of beverages, grains, oils, and food increasing by 7.1%, 9.1%, and 4.1% year-on-year in October, attributed to the impact of the double festival and "Double Eleven" shopping event [2]. - Real estate transactions in 30 major cities decreased by 24.8% year-on-year, with first, second, and third-tier cities seeing declines of 41.2%, 13.6%, and 23.3% respectively, indicating continued weakness in property sales and prices [2]. - Service consumption improved, with the tourism price index in Hainan rising by 2.1% month-on-month and movie box office revenue increasing by 90.2% year-on-year due to the release of new films [2]. Group 2: Technology & Manufacturing - The electronic industry remains highly prosperous, driven by explosive growth in storage demand due to AI, with prices for storage devices continuing to rise [3]. - The construction sector faces weak demand, with seasonal factors leading to a decline in building material demand, resulting in a subdued supply-demand structure and weak price fluctuations in steel and building materials [3]. - The lithium battery industry is experiencing increased prosperity, with the price of lithium hexafluorophosphate continuing to rise significantly, supported by tight supply and recovering downstream demand [3]. Group 3: Human Flow and Logistics - Air passenger demand has improved significantly, with long-distance travel demand increasing by 3.7% month-on-month and 14.5% year-on-year, reflecting a recovery in business travel [4]. - Freight logistics also showed improvement, with national highway truck traffic and railway freight volume increasing by 2.6% and 0.2% month-on-month respectively [4]. - However, shipping prices continue to decline, and port throughput has decreased, indicating fluctuations in export demand [4].

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $346.9 million, an increase of 1.8% compared to $341 million in Q3 2024, driven by higher fleet combined time charter equivalent (TCE) rates despite lower available days [16] - EBITDA for Q3 2025 was $193.9 million, while net income was $56.3 million, with earnings per common unit at $1.90 [4][18] - For the first nine months of 2025, total revenue decreased by $23 million to $978.6 million, with adjusted EBITDA down by $29 million to $519.8 million and adjusted net income down by $67 million to $196 million compared to the same period in 2024 [19][20] Business Line Data and Key Metrics Changes - The TCE rate for the combined container and tanker fleet increased by 3.7% and 1.7% to $31,832 and $26,238 per day, respectively, while the TCE rate for the dry bulk fleet decreased by 3.5% to $17,976 per day [17] - The company added $745 million of long-term contracted revenue during the quarter, with total contracted revenue amounting to $3.7 billion, including $1.3 billion from tankers, $0.2 billion from dry bulk, and $2.2 billion from containerships [15][16] Market Data and Key Metrics Changes - The geopolitical environment has shifted trading routes, impacting the tanker and dry bulk markets positively due to sanctions on Russian, Venezuelan, and Iranian oil [22][26] - The dry bulk market is expected to benefit from strong Atlantic basin iron ore growth, with significant new projects in Guinea and Brazil anticipated to create demand for additional vessels [24][25] Company Strategy and Development Direction - The company is focused on modernizing its fleet, with an average fleet age of 9.7 years compared to the industry average of 13.5 years, and aims to maintain a low net loan-to-value (LTV) ratio of 20.5% [4][5][7] - The company has a strong risk management culture, continuously monitoring and assessing risks while maintaining a diversified fleet [5][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day [8][12] - The company remains focused on capital allocation and opportunistic purchases, with a strong backlog of contracted revenue providing visibility in an uncertain environment [11][15] Other Important Information - The company completed a $300 million senior secured bond issuance at a coupon of 7.75%, which will be used to refinance existing floating rate debt, thereby reducing interest rate risk [9][21] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to fix its vessels going forward into 2026? - Management indicated that they are using maximum flexibility, with the majority of open vessels being dry bulk, and they are comfortable with fixing the fleet based on market assumptions [31][32] Question: Is there an opportunity to build smaller ships against contracts? - Management noted increased activity in the market for smaller vessels, emphasizing the importance of counterparty and duration in such projects [36][37] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will enhance optionality, as the company has $1.2 billion of debt-free vessels, maintaining the same net debt before and after the bond issuance [39]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $346.9 million, a 1.8% increase from $341 million in Q3 2024, while revenue for the first nine months of 2025 was $978.6 million, a decrease of $23 million compared to the same period in 2024 [4][18] - EBITDA for Q3 2025 was $193.9 million, adjusted EBITDA decreased by $1.4 million compared to Q3 2024, while EBITDA for the first nine months of 2025 was $519.8 million, a decrease of $29 million from the previous year [4][19] - Net income for Q3 2025 was $56.3 million, down from $97 million in Q3 2024, and adjusted net income for the first nine months of 2025 was $196 million, a decrease of $67 million compared to the same period in 2024 [4][19] Business Line Data and Key Metrics Changes - The combined time charter equivalent (TCE) rate for Q3 2025 increased by 2.4% to $24,167 per day, with container and tanker fleets seeing increases of 3.7% and 1.7% respectively, while the dry bulk fleet's TCE rate decreased by 3.5% to $17,976 per day [16][17] - For the first nine months of 2025, the TCE rate for containers increased by 3.1% to $31,213 per day, while dry bulk and tanker TCE rates decreased by approximately 9.2% and 3.5% respectively [19] Market Data and Key Metrics Changes - The company reported a low net loan-to-value (LTV) ratio of 34.5% and a gross LTV of 40.6% at the end of Q3 2025, with a target net LTV of 20.5% [5][8] - The company has a revenue backlog of $3.7 billion, with 92% of container days and 73% of tanker days fixed for the fourth quarter of 2025 [8][16] Company Strategy and Development Direction - The company focuses on fleet modernization, with an average fleet age of 9.7 years compared to the industry average of 13.5 years, and aims to maintain a strong risk management culture [4][5] - The company has a reinvestment program that includes acquiring new vessels and opportunistically selling older ones, with plans to invest $1.9 billion in 25 newbuilding vessels through 2028 [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day [8][12] - The geopolitical environment, including the Ukraine war and changing global trade patterns, is seen as a challenge but also an opportunity for the company to adapt and thrive [10][22] Other Important Information - The company successfully issued a $300 million senior secured bond at a coupon of 7.75%, which will be used to refinance existing floating rate debt, thus reducing interest rate risk [9][21] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to manage its vessels in 2026 given the current flexibility? - Management indicated that they are comfortable with their current position and will continue to assess the market for fixing vessels, particularly in the dry bulk sector where they see significant upside [31][32][34] Question: Is there an opportunity to build smaller feeder ships in response to market demand? - Management acknowledged increased activity in the market for smaller vessels but emphasized the importance of careful evaluation of counterparties and contract durations [36][37] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will enhance the company's financial flexibility and maintain a strong balance sheet, with a focus on optionality given the significant amount of debt-free vessels [39]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $346.9 million, an increase of 1.8% compared to $341 million in Q3 2024. EBITDA was $193.9 million, and net income was $56.3 million, with earnings per common unit at $1.90 [4][16][17] - For the first nine months of 2025, total revenue decreased by $23 million to $978.6 million, with adjusted EBITDA down by $29 million to $520 million and adjusted net income down by $67 million to $196 million compared to the same period in 2024 [17][18] Business Line Data and Key Metrics Changes - The combined time charter equivalent (TCE) rate for the container fleet increased by 3.1% to $31,213 per day, while the TCE rate for the tanker fleet decreased by 3.5% to $26,290 per day. The dry bulk fleet's TCE rate was down 9.2% to $15,369 per day [18] - The company added $745 million of long-term contracted revenue during the quarter, with total contracted revenue amounting to $3.7 billion, including $1.3 billion from tankers, $0.2 billion from dry bulk, and $2.2 billion from containerships [14][15] Market Data and Key Metrics Changes - Geopolitical developments are shifting trading routes, with the Ukraine war affecting grain exports and benefiting exports from Brazil and the U.S. The tanker market is expected to remain positive due to a low order book and an aging fleet [21][24] - The dry bulk market shows steady long-term demand growth with a constrained supply of vessels, particularly due to aging fleets and low new building prices [22][23] Company Strategy and Development Direction - The company focuses on modernizing its fleet, with an average fleet age of 9.7 years compared to the industry average of 13.5 years. The reinvestment program aims to maintain a younger fleet and reduce net loan-to-value (LTV) ratios [5][11] - The company emphasizes a strong risk management culture, continuously monitoring risks and structuring transactions with risk management professionals [6][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day for open index days. The company is well-positioned to capitalize on market opportunities [8][12] - The management highlighted the importance of flexibility in chartering decisions, particularly in the dry bulk sector, where they see significant upside potential [30][32] Other Important Information - The company completed a $300 million senior secured bond issuance at a coupon of 7.75%, which will be used to refinance existing floating rate debt and improve interest rate risk management [9][20] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to manage its vessels in 2026 given the flexibility in charter coverage? - Management indicated that they are comfortable with their current position and will continue to assess market conditions to determine the best approach for fixing vessels [30][32] Question: Is there an opportunity to build smaller feeder ships in response to market shifts? - Management acknowledged increased activity in the market for smaller vessels but emphasized the importance of careful evaluation of counterparties and contract durations [34][35] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will be used to diversify funding sources and maintain optionality, with a focus on managing debt levels effectively [37]

Report Industry Investment Rating - The shipping industry for the European route is rated as "bearish" in 2025 [6] Core Viewpoints - The continuous development of the China-Europe Railway Express is changing the traditional China-Europe logistics pattern, evolving from a supplementary role to a competitive force against the shipping system, especially on European routes [10] - The substitution effect of the China-Europe Railway Express on European route shipping will deepen, and the "asymmetric substitution" relationship between the two needs close attention, which may significantly impact European route cargo volume [5][48][49] Summary by Directory 1. Network Development Promotes Comprehensive Competitiveness Improvement - In 2024, the westbound channel's annual departures exceeded 11,000 trains, with container transport volume reaching 1.14 million TEUs, up 12.9% and 12.5% year-on-year respectively, higher than the global shipping trade's 2.3% annual growth rate. As of 2024, the freight volume of the China-Europe Railway Express accounted for 6.3% of the total Asia-Europe shipping trade volume [11] - The "Three Channels and Five Ports" network layout provides systematic advantages. The westbound channel undertakes over 70% of the transport tasks, the middle channel plays a diversion role in winter, and the eastbound channel connects Northeast China with European Russia and Nordic countries. The newly opened west 2 channel saw explosive growth in 2024 [15] - The five ports have evolved into comprehensive hubs, and the "one-time inspection, full-line clearance" mode improves cross-border transport efficiency. The domestic and overseas networks cover many cities, shortening the delivery time to European inland areas by 7 - 10 days compared to shipping [18][23] 2. Differentiated Substitution Effect Driven by Price Factors - There is an asymmetric substitution relationship between the China-Europe Railway Express and shipping. When shipping prices rise sharply, high-value goods requiring high transport timeliness and supply chain stability will shift to the railway, as seen during the 2020 - 2021 pandemic and the 2024 Red Sea crisis [24] - The asymmetric nature lies in that the impact of rising shipping prices on the demand for the railway express is much greater than the impact of railway price adjustments on the return of shipping demand. This is due to the different core demands and cost - accounting logics of the two customer groups [29][31] 3. Multi - Dimensional Market Penetration and Structural Characteristics - In terms of cargo value, high - value products prefer the China-Europe Railway Express due to their high requirements for transport timeliness and reliability, while low - value commodities mainly use shipping. The proportion of high - value goods transported by railway in EU imports from China is about 5%, compared to 3% for low - value goods [32] - Geographically, the time - saving advantage of the railway express is more prominent for inland countries in Central and Eastern Europe. The difference in implicit costs between regions further strengthens the sensitivity of high - value goods to shipping price fluctuations [33][39] 4. Continuous Evolution of Structural Adjustment and Development Trends - The proportion of low - value goods in the China-Europe Railway Express's cargo structure is rising, while that of high - value goods is slightly falling, and the gap between them is narrowing. Geopolitical risks and falling shipping prices have slowed the shift of high - value goods to the railway [42] - The growth of low - value goods' railway transport demand is driven by policy subsidies, the "rail - sea - rail" multimodal transport mode of the west 2 channel, and the optimization of the railway express's operation mode [44] 5. Summary and Outlook - In 2024, the China-Europe Railway Express's cargo volume accounted for 6.3% of the total Asia - Europe trade volume, indicating it has become an important force affecting the China - Europe logistics pattern. Its relationship with shipping is shifting from simple complementarity to a "complementary - competitive" dynamic balance [48] - The substitution effect of the China - Europe Railway Express on European route shipping will deepen. The railway express's internal structural adjustment will continue, and the market shares of high - and low - value goods will become more balanced [48] - When European route shipping prices rise by over 50%, 3 - 5% of the cargo is expected to shift to the railway, with high - value goods' transfer ratio possibly reaching 8 - 10%. The China - Europe Railway Express's penetration in the Mediterranean coastal European inland areas will increase, and its unit transport cost is expected to decrease by 10 - 15% in the next three years [49]

Investment Rating - The report maintains a "Positive" investment rating for the bulk supply chain industry [12] Core Viewpoints - The bulk supply chain industry is at a dual bottom of "commodity prices" and "corporate profits," with a cyclical turning point approaching. Historical data shows a positive correlation between the profits of bulk supply chain companies and PPI, indicating that profits tend to rise in inflationary environments. Since July 2025, the "anti-involution" policy has been implemented, driving improvements in PPI growth rates [2][6][28] - Leading companies in the sector, such as Xiamen Xiangyu, Wuchan Zhongda, and Jianfa Co., have actively adjusted their business strategies and strengthened risk management, with their supply chain business profits turning positive year-on-year in Q3. The combination of liquidity easing and global supply chain restructuring, along with the steady advancement of domestic policies, suggests that the cyclical turning point for certain bulk commodities is gradually approaching, with clearer signals of profit improvement in the sector [2][6][42] Summary by Sections Bulk Supply Chain - The bulk supply chain industry is driven by capital, where the scale of business is determined by the amount of capital and turnover efficiency significantly impacts profitability. Macro demand is a crucial variable affecting trade turnover demand. The industry is currently at a dual bottom of "commodity prices" and "corporate profits," with a cyclical turning point approaching. The implementation of the "anti-involution" policy has led to a rebound in commodity prices, with indices for metals, energy, and agricultural products showing year-on-year increases of 4.5%, 2.5%, and 2.1% respectively in Q3 2025 [6][28][34] - Leading companies are accelerating their globalization efforts and integrating resources across the entire supply chain to enhance market share both domestically and internationally. Companies like Xiamen Xiangyu and Xiamen Guomao are maintaining favorable dividend policies, providing a safety net for investors [6][34][42] Transportation Chain - Domestic passenger traffic continues to grow, with a 5% year-on-year increase in domestic passenger volume and a 19% increase in international passenger volume as of November 14. The average domestic passenger load factor has improved by 2.6 percentage points year-on-year, while the international load factor has increased by 4.8 percentage points [7][43][48] - The report highlights that the supply-demand relationship in the domestic market continues to improve, with oil prices rising by 1.0% year-on-year. The outlook for the industry suggests that revenue is expected to improve marginally, driven by tightening supply and significant cost improvements [7][48] Shipping - The oil shipping sector remains buoyant, with the average VLCC-TCE rate rising by 26.2% to $120,000 per day. The overall tight capacity and OPEC+ production increases are expected to sustain the positive outlook for oil shipping. Conversely, the container shipping sector has seen a decline, with the SCFI index dropping by 2.9% to 1,451 points [8][13] - The report recommends companies such as COSCO Shipping Energy and China Merchants Energy for investment, given the favorable conditions in the oil shipping market [8][42] Logistics - During the 2025 "Double Eleven" shopping festival, the average daily express delivery volume reached 634 million packages, a 9% year-on-year increase. The air freight price index has shown a slight increase as the cross-border e-commerce peak season approaches [9][14] - The report suggests focusing on companies like SF Holding, which is entering a phase of absolute return, and Xiamen Xiangyu, which is expected to benefit from improved export expectations and strong dividend capabilities [9][42]

Core Insights - The report highlights that 81% of surveyed Chinese enterprises in the EU perceive an increase in uncertainty within the current business environment, with half of the respondents indicating a firm commitment to deepening their operations in the EU despite challenges [1][17][19]. Group 1: Business Environment and Challenges - The overall evaluation of the EU business environment by Chinese enterprises has declined for six consecutive years, with a score of 61 in 2025 compared to 73 in 2019, indicating significant deterioration [17]. - Over 35% of surveyed enterprises reported feeling the pressure of a worsening business environment, particularly in sectors like new energy, information technology, and healthcare [17][18]. - High labor costs and complex geopolitical factors are identified as dual pressures affecting Chinese enterprises operating in the EU, with over 40% of respondents experiencing differential treatment due to their Chinese identity [18][19]. Group 2: Trade and Investment Dynamics - In 2024, the bilateral trade volume between China and the EU reached €732.2 billion, showing resilience despite a slight decline of 1.6% year-on-year [10]. - Chinese investment in the EU is shifting focus towards Eastern Europe, with Hungary emerging as a key destination, particularly in the new energy vehicle and battery manufacturing sectors [12]. - The report indicates that over 80% of surveyed enterprises expect their operational status to remain stable or improve in 2024, with 62% anticipating revenue growth in 2025 [14]. Group 3: Recommendations and Future Outlook - The report proposes 336 specific recommendations for improving the EU business environment, focusing on transparency, market access, fair competition, and supply chain security [25]. - It emphasizes the importance of balancing economic security with openness to foster a stable policy environment for enterprises [25][26]. - The year 2025 marks the 50th anniversary of China-EU diplomatic relations, which is seen as an opportunity to deepen mutual trust and cooperation across various sectors [26].

Core Viewpoint - The recent performance of the Hong Kong IPO market has been active, with several stocks showing significant gains, particularly Derxiang Shipping (02510.HK), which has seen a remarkable increase in its stock price since its listing on November 1, 2024, becoming a focal point in the sector [2] Group 1: Company Performance - Derxiang Shipping's stock price reached a closing price of HKD 9.13 on November 13, 2025, representing a cumulative increase of 174.8% since its listing, and an increase of 118% from its initial offering price of HKD 4.18 per share [2] - The company has a solid business layout and excellent performance, which has further consolidated its market-leading position [3] - As of June 30, 2025, Derxiang Shipping operated 49 routes, serving 22 countries and regions globally, with approximately 60 ports [3] Group 2: Market Conditions - The shipping market experienced a price surge in May and June 2025, driven by concentrated demand for exports and tight port capacity, leading to a rapid increase in global shipping prices [3] - Ongoing tensions in the Middle East have increased risks on existing shipping routes, forcing vessels to take longer alternative routes, which not only extended transit times but also raised operational costs such as fuel and labor, further supporting rising shipping prices [3] Group 3: Financial Performance - In the first half of 2025, Derxiang Shipping reported revenues of approximately USD 641 million, a year-on-year increase of 18.7%, and a net profit of USD 189 million, a substantial year-on-year growth of 222.0% [4] - The gross profit margin improved from 8.7% in the same period last year to 19.8% [4] - The significant profit increase was attributed to rising average freight rates and an increase in the number of vessels rented at higher rates [5] Group 4: Operational Efficiency - The young fleet structure of Derxiang Shipping has reduced maintenance costs and improved operational efficiency and fuel economy [5] - A high proportion of owned vessels has decreased reliance on the charter market, providing the company with greater operational flexibility and cost control capabilities, which is beneficial for further profit enhancement [5] Group 5: Resilience in Performance - Despite market fluctuations in the second half of 2025, Derxiang Shipping maintained strong performance, with revenues of USD 963 million in the first nine months, a slight year-on-year increase of 0.51% [6] - The company’s flexible market strategy, young fleet structure, and focus on the Asia-Pacific market have allowed it to sustain steady growth amid global market volatility [6]

Core Insights - The Western Land-Sea New Corridor has achieved a cumulative container volume of 2.559 million TEUs since the launch of the iron-sea intermodal service in 2017 [1] - The corridor aims to be economically efficient, convenient, green, and safe by 2025, with a target of reaching 500,000 TEUs in container volume for iron-sea intermodal transport [1] - In September of this year, the annual dispatch volume of the iron-sea intermodal service exceeded 1 million TEUs for the first time, marking a 110-fold increase since its inception [1] Container Volume and Growth - The cumulative container volume for the iron-sea intermodal service has reached 2.559 million TEUs, achieving the 2025 target of 500,000 TEUs ahead of schedule [1] - From January to October this year, the freight volume and value from Chongqing via the Western Land-Sea New Corridor reached 272,300 TEUs and 48.962 billion yuan, respectively, representing year-on-year growth of 33% and 27% [1] Network Expansion - The transportation network has expanded to cover 581 ports in 127 countries and regions [1] - The types of goods transported now include over 1,300 products across more than 10 major categories, such as electronics, complete vehicles and parts, machinery, and food [1]

Core Insights - The eighth China International Import Expo showcased the potential of Latin American companies, particularly from Peru and Ecuador, in tapping into the Chinese market for fresh produce and flowers [2] - The opening of Qianhai Port, a key project under the Belt and Road Initiative between China and Peru, has significantly reduced shipping times and costs for Peruvian goods to China [2] Trade and Economic Impact - Qianhai Port's operational efficiency has decreased the shipping time from Peru to China from over 30 days to 23 days, resulting in a logistics cost reduction of over 20% [2] - In the first three quarters of this year, bilateral trade between China and Ecuador reached approximately $12.919 billion, marking a 26.2% increase compared to the same period in 2024 [2] - China's imports from Ecuador amounted to $7.293 billion, reflecting a year-on-year growth of 24% [2]