Summary of Zhongyuan Shipping International Conference Call Company Overview - Zhongyuan Shipping International is a comprehensive shipping service platform under the COSCO Shipping Group, benefiting from the ship renewal cycle and high dividend yield, with a projected revenue of HKD 3.6 billion and a net profit of HKD 710 million in 2024, reflecting a compound annual growth rate (CAGR) of over 30% [2][4][5] Core Business and Performance - The company has established a service ecosystem covering the entire ship industry chain, including paint production, ship trading agency, insurance consulting, and spare parts supply, forming a closed-loop service for the entire lifecycle of ships [2][6] - The paint business is a significant source of elasticity, with Zhongyuan Jotun contributing HKD 290 million in investment income, accounting for 41% of net profit [2][6][7] - Revenue from spare parts and insurance agency business is expected to reach HKD 1.8 billion in 2024, with a stable gross margin of 6% [2][8] Financial Highlights - The company has a high cash reserve, benefiting from the Federal Reserve's interest rate hikes, with financial income increasing from HKD 50 million in 2021 to HKD 270 million in 2024, accounting for 38% of profits [4][13] - The dividend payout ratio has been maintained at around 100%, with a projected dividend of HKD 0.215 per share in 2024, resulting in a dividend yield close to 10% [4][13] Future Growth Prospects - The company is well-positioned for future growth, with expected net profits of HKD 740 million, HKD 760 million, and HKD 800 million from 2025 to 2027, corresponding to price-to-earnings (PE) ratios of 11, 11, and 10 [4][14] - The strategic layout in the green methanol sector, through a joint venture with Jidian and Shanghai Port Group, aims to produce 200,000 tons annually starting in 2026, potentially capturing early advantages in the shipping new energy market [2][12] Valuation and Market Position - Zhongyuan Shipping International is considered a potential candidate for inclusion in the Hong Kong Stock Connect, with a valuation significantly lower than comparable companies, offering a dividend yield of approximately 10% compared to 6%-7% for others [3][4] - The company's reasonable market value is estimated at HKD 10.7 billion, indicating over 30% upside potential from the current market capitalization of HKD 8 billion [4][15] Industry Context - The global shipping industry is experiencing a tightening of environmental regulations, with the International Maritime Organization (IMO) aiming for net-zero greenhouse gas emissions by 2050, making green methanol a preferred choice for shipowners [11] Key Takeaways - Zhongyuan Shipping International is positioned for robust growth with a diversified business model and strong financials, making it an attractive investment opportunity in the shipping sector [9][10]

Core Viewpoint - The strategic goal of resource integration by the company remains unchanged despite the shift from restructuring to equity acquisition [1][4]. Group 1: Acquisition Details - On July 11, the company announced that its wholly-owned subsidiary, China Foreign Container Transport Co., Ltd. (中外运集运), will acquire shares of Antong Holdings (安通控股) for a maximum of 1.8 billion yuan [1][2]. - The acquisition will make 中外运集运 and its concerted actions the largest shareholder of Antong Holdings, holding approximately 13.80% of the total share capital [3][4]. - The company plans to increase its stake in Antong Holdings by an additional 360 million to 720 million yuan within 12 months, with a purchase price not exceeding 3.20 yuan per share [3][4]. Group 2: Financial Performance - In Q1 2025, the company reported revenues of 5.595 billion yuan and a net profit of 865 million yuan, while Antong Holdings achieved revenues of 2.042 billion yuan and a net profit of 241 million yuan [1][6]. - Antong Holdings experienced a revenue growth of 26.35% and a net profit growth of 371.53% in the same period [6]. Group 3: Strategic Integration - The integration aims to create a comprehensive shipping platform that connects foreign trade container shipping, domestic logistics, and roll-on/roll-off transportation, enhancing the overall competitiveness in the logistics industry [5][6]. - The operational strengths of 中外运集运 in foreign trade and Antong Holdings in domestic trade are complementary, which could lead to significant synergies if successfully integrated [5][6].

Investment Rating - The report recommends investment in the logistics sector, specifically in companies like SF Holding and Haichen Co., due to their resilience and growth potential [2][3]. Core Views - The express delivery industry has seen a significant increase, with national express delivery volume surpassing 1 trillion pieces, indicating strong growth potential [2]. - The logistics sector is under pressure, particularly in hazardous materials logistics, but there is a push towards smart logistics, which is expected to benefit companies like Haichen Co. [3]. - The aviation sector is experiencing robust growth, with major airports like Baiyun and Shenzhen expected to see significant profit increases in the first half of 2025 [4]. - The shipping industry is facing challenges, with a slight increase in the BDI index but a decline in container shipping rates [4][36]. Summary by Sections Transportation Market Review - The transportation index rose by 0.7% during the week of July 5-11, underperforming the Shanghai and Shenzhen 300 index by 0.1% [12]. Industry Fundamentals Tracking Express Delivery - The national express delivery volume has exceeded 1 trillion pieces, with a year-on-year growth of 16.6% [2]. - Jitu's package volume reached approximately 7.39 billion pieces in Q2 2025, with a growth rate of 3.5% [2]. Logistics - The chemical product price index (CCPI) is at 4035 points, down 14.4% year-on-year [3]. - The domestic shipping price for liquid chemicals is 163 RMB/ton, down 13.9% year-on-year [3]. Aviation Airports - Baiyun Airport expects a net profit of 679 million to 830 million RMB for H1 2025, a year-on-year increase of 55.06% to 89.51% [4]. - Shenzhen Airport anticipates a net profit of 287 million to 337 million RMB for H1 2025, a year-on-year increase of 64.78% to 93.47% [4]. Shipping - The CCFI index for export container shipping is 1313.7 points, down 2.2% week-on-week and down 39.0% year-on-year [21]. - The BDI index for dry bulk shipping is 1483.6 points, up 2.2% week-on-week but down 23.7% year-on-year [36]. Road and Rail Ports - The total cargo throughput at monitored ports was 25.988 million tons, down 5.28% week-on-week [5]. - The number of trucks passing through highways was 52.977 million, down 2.42% week-on-week but up 1.71% year-on-year [5].

Industry Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Insights - The transportation industry is experiencing a supply-driven cycle, with technology fostering new platforms [1] - The shipping and aviation sectors are seeing efficiency declines rather than capacity shortages, influenced by geopolitical tensions and global trade disruptions [2] - The logistics sector is shifting from growth to price-driven profitability, with a potential transition from trade to manufacturing [4] - New energy vehicles and autonomous driving are expected to lower transportation costs and create new platforms for ride-hailing and instant delivery services [5] Summary by Sections 1. Shipping and Aviation - The shipping cycle since 2020 has been characterized by a decline in operational efficiency rather than a shortage of capacity [2] - Future aviation cycles may also be driven by decreased aircraft turnover efficiency [2] 2. Ports and Highways - With demand growth slowing, the focus is shifting from new capacity expansion to the integration of existing capacities, which will determine profitability [3] - Mergers and acquisitions in the highway sector are expected to enhance return on equity (ROE) and price-to-book (PB) ratios [3] 3. Express Logistics - The growth rate of express delivery volumes is slowing, with single-package pricing becoming the main driver of profitability [4] - Future price competition may ease, and the transition from trade to manufacturing could influence profit growth [4] 4. Transportation Platforms - The emergence of new energy vehicles and autonomous driving technologies is expected to create significant cost savings and new business models in transportation [5] 5. Shipping Market Dynamics - Shipping rates are influenced by supply-demand cycles, with operational efficiency being a key factor [6][8] - Port congestion and rerouting of vessels have led to significant increases in shipping rates [10][11] 6. Oil Shipping - Oil tanker earnings are also subject to supply-demand dynamics, with operational efficiency impacting daily earnings [12][14] 7. Air Transportation - The aviation sector is expected to see a reversal in supply-demand dynamics by 2025, with demand gradually recovering post-pandemic [27][29] - The growth in the number of aircraft is projected to remain low, impacting operational efficiency [31][32] 8. Infrastructure Development - The growth rate of freight demand across highways, railways, and ports is expected to trend downward, affecting capacity expansion [39][41] - The integration of existing highway assets is becoming more prevalent as new construction slows [42][46] 9. Market Opportunities - The express delivery sector is witnessing a slowdown in volume growth, but revenue is still increasing due to rising e-commerce penetration [61][63] - Price competition in the express delivery market may ease, presenting investment opportunities [64][66] 10. Supply Chain Dynamics - The profitability of large commodity supply chain companies is closely tied to fluctuations in commodity prices [67][70] - The shift from trade to manufacturing in the supply chain sector is becoming more pronounced [71][73] 11. New Energy and Autonomous Transportation - The adoption of new energy vehicles is expected to significantly reduce transportation costs, while autonomous driving technologies are anticipated to enhance operational efficiency [77][79] - The rapid increase in the penetration of smart driving technologies is projected to reshape the transportation landscape [80][82]

Investment Rating - The industry is rated as "Recommended" based on positive fundamental outlook and expected outperformance of the industry index compared to the benchmark index [3][8]. Core Insights - The report highlights an increase in the dry bulk market's performance, a focus on the valuation of Hong Kong infrastructure assets, an upward trend in the aviation industry's fundamentals for 2025-2026, and potential price competition and valuation recovery in the express delivery sector for 2025 [1][7][18][20]. Shipping - The container shipping market shows signs of recovery with slight price increases on the US routes, while the dry bulk market, particularly for Panamax vessels, has seen a notable rise in rates due to increased demand from coal and grain shipments [7][11][16]. - The report emphasizes the importance of monitoring trade agreements between the US and other countries, which could impact shipping volumes [12][16]. Infrastructure - The report indicates that Hong Kong infrastructure assets still have room for valuation improvement, with stable earnings and dividend expectations from leading highway assets [18]. - The yield on 10Y and 30Y government bonds has slightly increased, suggesting continued investment interest in dividend-paying infrastructure assets [18]. Express Delivery - The express delivery sector is expected to see a growth rate exceeding 20% in 2024, with a continued double-digit growth forecast for 2025 [20]. - The report notes a recent recovery in express delivery prices following a period of intense price competition, supported by regulatory measures against "involution" in the industry [20]. Aviation - Key performance indicators in the aviation sector are on the rise, with passenger volumes increasing and a low growth rate in supply, indicating a potential stabilization in revenue levels [21][74]. - The report recommends several airlines based on their performance metrics, including China Southern Airlines and Air China [21]. Logistics - The logistics sector shows a slight increase in cross-border transport volumes, with stable short-haul freight rates [22][87]. - The report highlights the potential for significant non-operating income for China National Foreign Trade Transportation Group in 2025, which could positively impact dividends [22].

Core Insights - The 2025 China International Ship Technology and Safety Forum focused on enhancing shipping safety through technological innovation, with discussions on safety management, smart shipping, and green transformation [2][3] Group 1: Safety Management - The construction of a safety assurance system was a focal point, with emphasis on the innovative application of smart meteorological navigation technology to proactively manage extreme weather [2] - The integration of numerical simulation, intelligent forecasting, and route optimization is proposed to build a proactive defense system against complex maritime conditions [2] - The importance of technology in enhancing the ability of vessels to respond to challenging sea conditions was highlighted, reinforcing that safety is the baseline for the shipping industry [2] Group 2: Smart Shipping and Green Transformation - Discussions on digital integration, technological breakthroughs, and industrial collaboration were central to the forum, with a consensus on the transformative power of digitalization, AI, and green development [3] - The president of Shanghai Maritime University emphasized the need for talent cultivation, research breakthroughs, and international cooperation to support the shipping industry's transformation [3] - The potential of wind-assisted propulsion technology was discussed, noting its significant advantages in energy savings and investment returns, while calling for collaboration to address application bottlenecks such as incomplete standards and insufficient regulatory support [3] Group 3: Future Outlook - The forum participants reached a consensus on the clear development path of "smart leadership, safety collaboration, and green drive," indicating a collaborative effort between China and the global shipping community towards a more open, inclusive, and sustainable future [3]

会议现场，国际航运组织代表、知名专家学者、相关企业负责人等200余人齐聚一堂。洋浦经济开 发区交通运输和港航局负责人详细分析洋浦港高质量发展的机遇。洋浦国际投资咨询有限公司相关负责 人围绕洋浦港口区位优势、海南自贸港航运优势政策、船舶登记和融资租赁便利化举措等方面，推介海 南自由贸易港航运产业。海南国际船舶登记管理局负责人以"船籍优选地，共赢新航程"为题，介绍海南 国际船舶登记的制度优势与实践。 当天，海南省交通运输厅、武汉理工大学和湖北东湖实验室签署战略合作框架协议，内容涵盖了科 技合作、人才培养、人员交流三大核心领域。儋州市政府(洋浦管委会)与北京首创财富投资管理有限公 司等5家重点企业达成多项投资协议，项目总投资达20亿元，为航运产业发展注入新动能。 本次专场活动不仅搭建了政企对话的高端平台，更以62条航线织就的全球航运网络、1000余家市场 主体汇聚的创新生态、15项船籍政策突破的制度型开放实践，彰显了海南自贸港"运输往来自由便利"核 心政策的落地成效。儋州市政府负责人表示，儋州正不断织密航线网络、扩大港口"朋友圈"，同时利 用"中国洋浦港"船籍港等一系列含金量极高的开放政策，大力发展海上风电等清洁能 ...

Core Viewpoint - The Chinese shipping industry has a solid foundation for cultivating new productive forces and must seize opportunities from technological revolutions and industrial transformations to address critical technological challenges, thereby supporting the construction of a strong transportation nation [2]. Group 1: Technological Innovation and Upgrades - Technological innovation is becoming the "core engine" for activating new productive forces in the shipping industry amidst global green transformation and intelligent revolution [2]. - The intelligent transformation of ports is a key battleground for technological empowerment, with examples like the Ningbo-Zhoushan Port achieving breakthroughs in automated container terminals and launching a "Four Port Linkage" cloud platform [3]. - Hainan's ports are advancing digital transformation to create a smart port cluster, focusing on big data centers and autonomous vessel navigation technologies to enhance transportation systems [3]. Group 2: Addressing Key Technological Challenges - While China's maritime sector has generally kept pace internationally in areas like automated terminals, it still faces challenges with certain specialized equipment [4]. - There is a need for technological breakthroughs in polar vessels and new energy shipbuilding, as well as advancements in key navigation technologies for ocean-going vessels [4]. - The establishment of a comprehensive maritime standard system and participation in international rule-making are essential for enhancing global shipping resource allocation capabilities [4]. Group 3: Collaborative Efforts to Foster Innovation - The development of a comprehensive action plan for intelligent shipping technology is underway, focusing on R&D, application demonstration, regulatory standards, infrastructure, and talent development over the next decade [5]. - The cultivation of new technology talents through maritime education is crucial, with initiatives like pilot classes in intelligent navigation and the establishment of engineering excellence programs [5]. - The integration of technological innovation into every aspect of the shipping industry is reshaping the development landscape and providing robust technological support for building world-class ports and achieving a strong maritime nation [5].

Core Insights - The 2025 China Maritime Day event concluded successfully in Qionghai, gathering global shipping leaders to discuss green shipping, new energy vessels, and low (zero) carbon emissions in the shipping industry [1][2] - The event featured 18 activities, including high-level forums and discussions, with over 130 experts and representatives focusing on innovative development paths for sustainable maritime growth [1] - The event initiated the "Boao Initiative" for the 2025 China Maritime Day, calling for collaboration in promoting green, low-carbon, and intelligent development in the shipping sector [1] Group 1 - The event showcased the transformation of maritime technology, exemplified by the arrival of the world's first intelligent research and training vessel, "Xin Hongzhuan," at Longwan Port, Qionghai [2] - The China Maritime Day brought the establishment of the China Maritime Museum Boao Digital Pavilion, which combines advanced digital and physical displays to illustrate the evolution of Chinese maritime history from Zheng He's treasure ships to modern intelligent vessels [2] - The Zheng He Research Association and Hainan Daily Group launched the "He Li" cultural project to promote Chinese stories and wisdom, particularly to ASEAN countries, emphasizing cultural exchange [2] Group 2 - Coastal cities such as Haikou, Danzhou, and Qionghai held promotional events to showcase their unique characteristics and advantages, aiming to attract investment and strategic partnerships for the development of Hainan's free trade port shipping industry [2]

Core Viewpoint - The company, COSCO Shipping Energy Transportation Co., Ltd., is planning to issue A-shares to specific investors to raise up to 800 million RMB for the construction of new vessels, including VLCCs and LNG carriers [3] Group 1: Stock Performance - As of July 11, 2025, COSCO Shipping Energy's stock closed at 10.32 RMB, a 0.29% increase from the previous week [1] - The stock reached a high of 10.37 RMB and a low of 10.22 RMB during the week [1] - The company's current market capitalization is 49.234 billion RMB, ranking 7th in the shipping and port sector and 285th among all A-shares [1] Group 2: Stock Issuance - The company received an inquiry letter from the Shanghai Stock Exchange regarding its application for a specific stock issuance on May 16, 2025, and provided a response on June 11, 2025 [2] - The updated application documents include revisions based on further review comments from the exchange [2] - The issuance is subject to approval from the Shanghai Stock Exchange and the China Securities Regulatory Commission [2] Group 3: Dividend Distribution - The company announced a cash dividend of 0.21 RMB per A-share for the year-end distribution, totaling approximately 1.002 billion RMB [4] - The record date for the dividend is July 16, 2025, with the payment date set for July 17, 2025 [4] - The dividend distribution will be subject to different tax treatments for various types of shareholders, including QFIIs and Hong Kong investors [4]