Summary of CIMC Group Conference Call Company Overview - **Company**: China International Marine Containers (Group) Co., Ltd. (CIMC) - **Industry**: Diversified Industrial Manufacturing - **Market Capitalization**: Rmb 42.9 billion / US$ 6.02 billion - **Stock Price (as of November 6, 2025)**: Rmb 7.95 - **12-Month Target Price**: Rmb 10.50 (up from Rmb 8.20) [4][37] Key Points Industry and Business Outlook - **Offshore Engineering Growth**: CIMC's offshore engineering segment is transitioning to high-end marine equipment manufacturing, focusing on FPSO (Floating Production Storage and Offloading) and FLNG (Floating Liquefied Natural Gas) [2][17] - **Deep Sea Resource Development**: The global capital expenditure for deep sea resource extraction is expected to reach US$ 2.7 trillion over the next decade, driving demand for FPSO and other marine engineering orders [2][17] - **Container Business Resilience**: Despite a projected decline in container sales, the demand is expected to remain above historical averages due to easing US-China trade tensions [3][27] Financial Performance and Projections - **Profit Contribution**: The offshore engineering business is projected to contribute an additional Rmb 19 billion in gross profit from 2026 to 2027, with FPSO projects starting construction in 2026 [1][2] - **Container Sales Forecast**: Container sales are expected to be 2.1 million TEU in 2025, declining to 1.4 million TEU in 2026, but still above the historical average [3][27] - **Gross Profit Expectations**: Container gross profit is expected to remain above Rmb 60 billion in 2025-26, despite a projected decline [3][27] Valuation and Rating Changes - **Earnings Forecast Adjustment**: The earnings forecast for 2026-27 has been increased by 6-8%, reflecting better-than-expected container demand and the anticipated contribution from offshore engineering [1][37] - **Target Price Adjustment**: The target price has been raised to Rmb 10.50 based on improved earnings projections and a higher valuation multiple for the offshore engineering segment [4][37] Risks and Market Sentiment - **Geopolitical Risks**: The company's stock performance has been affected by geopolitical uncertainties and trade tensions, which have led to conservative market expectations for future earnings growth [4][34] - **Market Perception**: There is a belief that the market has not fully recognized the potential for profit growth from high-value offshore engineering projects [34] Additional Insights - **Long-term Demand for FPSO**: The demand for FPSO is projected to reach US$ 300 billion over the next decade, with a significant number of potential new orders in the pipeline [19][22] - **Operational Efficiency**: The company is expected to improve its operational efficiency and profitability in the offshore engineering segment as it begins to deliver high-value projects [14][36] Conclusion CIMC Group is positioned for growth in its offshore engineering segment driven by deep sea resource development, while its container business is expected to remain resilient despite market challenges. The upward revision of earnings forecasts and target price reflects a positive outlook for the company's future performance.

Investment Overview - The company has approved an external investment project named "Fosda Marine Engineering and Equipment Intelligent Manufacturing Project" with a total estimated investment of approximately 1 billion RMB [1] - The project will cover a total area of about 505 acres in the Qidong Lusi Port Economic Development Zone [1] Progress of External Investment - The wholly-owned subsidiary project company, Fosda Marine Engineering (Jiangsu) Co., Ltd., has completed its business registration and obtained a business license from the Qidong Data Bureau [2] - The registered capital of the new company is 58.8 million RMB, and it was established on November 10, 2025 [2] - The company will engage in various activities including the manufacturing of marine engineering equipment, underwater systems, and special equipment for oil drilling [2]

Core Viewpoint - Fosda announced plans to invest approximately 1 billion RMB in the "Fosda Marine Engineering and Equipment Intelligent Manufacturing Project" located in the Qidong Lusi Port Economic Development Zone, with a total land and sea area of about 505 acres [2] Investment Details - The project was approved during the fourth board meeting and the third extraordinary shareholders' meeting held on October 13 and October 30, 2025, respectively [2] - The project company will be responsible for bidding for the necessary industrial land and sea, as well as for the investment, construction, and operation of the project [2] - A wholly-owned subsidiary for the project has been registered and has obtained a business license from the Qidong Data Bureau [2]

Core Viewpoint - Fosda (603173.SH) has approved an investment plan for the "Fosda Marine Engineering and Equipment Intelligent Manufacturing Project" with a total investment of approximately 1 billion RMB [1] Group 1: Investment Details - The project will be located in the East Port Area of the Qidong Lusi Port Economic Development Zone, covering a total area of about 505 acres [1] - The company plans to establish a wholly-owned subsidiary for the project, along with a trading company and a port logistics operation company [1] - The project company will be responsible for bidding for the necessary industrial land and sea, as well as the investment, construction, and operation of the project [1] Group 2: Corporate Actions - The wholly-owned subsidiary project company has completed the business registration process and has recently obtained a business license issued by the Qidong Data Bureau [1]

Core Viewpoint - The company aims to leverage its accumulated key technologies and experience in the ship and marine engineering equipment sector to capture opportunities in the marine economy and drive continuous business development in this field [2] Group 1: Company Strategy - The company plans to utilize its advantages from participating in national key scientific research and development projects [2] - The company will actively follow up on relevant marine engineering equipment orders [2] - The company intends to engage in preliminary research for national deep-sea equipment [2]

Core Viewpoint - CNOOC Energy Development Equipment Technology Co., Ltd. has increased its registered capital by approximately 29%, from about 480 million RMB to about 620 million RMB, alongside changes in some executives [1] Company Information - The company was established in March 2014 and is legally represented by Tong Li [1] - Its business scope includes the development of key supporting systems for marine engineering, information system integration services, manufacturing of marine engineering equipment, manufacturing of marine platform equipment, manufacturing of specialized equipment, and manufacturing of deep-sea oil drilling equipment and oil extraction specialized equipment [1] - The company is wholly owned by CNOOC Development [1]

Core Viewpoint - Company *ST Songfa plans to invest 458 million yuan in the construction of a outfitting wharf project, which will significantly enhance its shipbuilding and outfitting capabilities [1] Group 1: Project Details - The project will be located in the southeastern area of the Longxing Island Port District [1] - Construction will include outfitting wharf, two lifting equipment, two boarding towers, public facilities, and supporting projects [1] - The construction period is estimated to be around 12 months [1] Group 2: Capacity and Future Prospects - Upon completion, the wharf will accommodate outfitting operations for vessels ranging from 100,000 to 400,000 tons [1] - The facility will be capable of undertaking construction tasks for high-end vessels, offshore drilling platforms, and offshore wind power installation ships [1] - The project aims to significantly improve the company's shipbuilding and outfitting capabilities [1]

Core Insights - The marine GDP of China reached 7.9 trillion yuan in the first three quarters, showing a year-on-year growth of 5.6%, indicating a stable and progressive situation in the sector [2] Marine Resource Supply - The supply level of marine resources in China has steadily increased, with the approved area for marine and island use reaching 262,000 hectares, a year-on-year increase of 19.2%. Additionally, the newly connected capacity for offshore wind power grew by 42.1% [5] Traditional Marine Industries - Traditional marine industries in China are performing well, with new shipbuilding orders, completed orders, and hand-held orders maintaining a global lead. The market share of new green ship orders in the international market reached 70.6% [6] - The marine engineering equipment manufacturing sector is developing steadily, with new orders, delivered orders, and hand-held orders in marine engineering equipment accounting for 60.0%, 50.8%, and 61.9% of the international market share, respectively [6] Emerging Marine Industries - The construction of the "blue granary" is progressing solidly, with domestic marine aquaculture production increasing by 4.8%, and marine aquaculture specifically growing by 5.7% [7] - Despite complex internal and external environments, China's marine foreign trade remains stable, with total maritime import and export volume increasing by 1.7%, and coastal port foreign trade cargo throughput growth accelerating compared to the first half of the year [7] Technological Advancements - The development of emerging marine industries is accelerating, with breakthroughs in high-end marine equipment and marine information technology, leading to the emergence of innovative technologies, products, and models [8] - The "Smart Flying" route in Qingdao represents China's first commercially operated smart shipping line, enabling remote control and autonomous navigation of container ships, improving safety and reducing fuel consumption by over 10% [10] Data Utilization - Multiple marine data models have been established in Qingdao, with applications in drug development, fishing vessel regulation, disaster warning, and insurance assessment, highlighting the growing importance of marine data aggregation and processing [12] Regional Development - Since the 14th Five-Year Plan, Shandong's marine GDP has grown at an average annual rate of 8.4%, with significant achievements in marine biomedicine, high-end marine equipment, and marine artificial intelligence, contributing to stable growth in the region [14] Future Developments - By the third quarter of 2025, significant breakthroughs in marine engineering equipment products are expected, including the delivery of the world's largest floating wind power platform and the first 80,000-ton marine aquaculture vessel [16] - The construction of intelligent capabilities in the marine sector has advanced, with the launch of the first trusted data space in the marine field in Zhejiang, aimed at unlocking the value of dormant marine data [16]

Core Viewpoint - China's marine economy shows a stable and progressive trend with a marine GDP of 7.9 trillion yuan, reflecting a year-on-year growth of 5.6% in the first three quarters of the year [1] Marine Shipbuilding Industry - The overall development of China's marine shipbuilding industry remains stable, with the completion of marine vessels and the volume of orders on hand increasing by 6.7% and 25.7% year-on-year, respectively [1] - China's market shares in newly received orders, completed shipbuilding, and orders on hand are 63.5%, 47.3%, and 58.6%, respectively, maintaining a global leading position [1] Green Ship Technology - Continuous improvement in the innovation and supply capacity of green ship products, with China's share of newly received green ship orders in the international market reaching 70.6% [1] - The first carbon capture system (OCCS) for newly built ships has successfully completed trials on an 82,000-ton bulk carrier, contributing to emissions reduction in the shipping industry [1] Marine Engineering Equipment - China continues to lead the world in new orders, delivered orders, and orders on hand for marine engineering equipment [1] - The marine engineering equipment manufacturing sector is developing steadily, with positive progress in the research and development of marine pharmaceuticals and biological products [1] Maritime Trade - The competitive advantages of high-end, intelligent, and green marine products are evident, aiding in the optimization of foreign trade structure [1] - Exports of wind turbine generators and parts, as well as ships, have increased by 23.9% and 22.4% year-on-year, respectively, showcasing the resilience of China's marine foreign trade [1]

Core Insights - China's marine economy showed steady progress in the first three quarters of the year, with a marine GDP of 7.9 trillion yuan, reflecting a year-on-year growth of 5.6% [1] Traditional Marine Industries - The traditional marine industries maintained a stable foundation, with shipbuilding output and orders increasing by 6.7% and 25.7% respectively [2] - China's market share in new ship orders, completed shipbuilding, and orders on hand reached 63.5%, 47.3%, and 58.6% respectively, maintaining a global leading position [2] - The marine tourism sector experienced a robust growth, with a 7.0% increase in value added, and cruise tourism saw a significant rise in both the number of cruises and passengers [2] Emerging Marine Industries - The marine engineering equipment manufacturing sector developed steadily, with offshore wind power capacity increasing by 42.1% year-on-year [3] - China's market share in new orders, delivered orders, and orders on hand for marine engineering equipment reached 60.0%, 50.8%, and 61.9% respectively, continuing to rank first globally [3] - Significant advancements were made in marine pharmaceuticals and bioproducts, with the approval of clinical trials for a new injection [3] Business Confidence in Marine Enterprises - Overall business performance in marine enterprises improved, with 55.6% of companies reporting revenue growth and 54.2% reporting profit increases [4] - A significant portion of enterprises expressed optimism about the economic environment, with 24.4% and 64.5% of companies holding optimistic and neutral views for the fourth quarter [4] - Marine foreign trade remained stable, with a 1.7% year-on-year increase in total import and export volume, indicating a recovery trend [4]