Summary of Conference Call Notes Industry Overview - The conference call primarily discusses the logistics real estate market in China, focusing on high-standard warehouses and their performance metrics across various regions [2][3][4]. Key Points and Arguments 1. **Market Size and Growth**: The national high-standard warehouse market has reached a stock of 1.72 billion square meters, showing a slight increase of nearly 2% quarter-on-quarter [2]. 2. **Rental Trends**: Average rental prices have seen a decline, with a quarter-on-quarter decrease of 8% and a year-on-year decrease of 11% [1]. The effective rental rate is approximately 21.6 [3]. 3. **Occupancy Rates**: Despite the decline in rental prices, occupancy rates have shown signs of recovery, with most projects experiencing an increase in occupancy rates compared to previous quarters [1][5]. 4. **Regional Performance**: - **Top Regions**: Jiangsu, Guangdong, and Zhejiang are the top three provinces in terms of warehouse stock [3]. - **City Rankings**: Suzhou leads in stock with 14 million square meters, followed by Shanghai and Tianjin, each nearing 10 million square meters [4]. - **Emerging Cities**: New supply is concentrated in cities like Foshan, Guangzhou, and Wuxi, indicating a shift in market dynamics [5]. 5. **Demand Drivers**: The primary demand for warehouse space comes from e-commerce, third-party logistics, and express delivery sectors, with notable activity during promotional events like 618 [8][41]. 6. **Future Supply Outlook**: The anticipated supply for 2025 is projected to be around 1.3 billion square meters, indicating a slowdown compared to previous years [16][39]. 7. **Market Adjustments**: The market is experiencing adjustments due to increased supply and changing demand dynamics, leading to a potential decline in rental prices and occupancy rates in the short term [47]. Important but Overlooked Content 1. **Impact of E-commerce Promotions**: The 618 shopping festival has significantly influenced warehouse demand, with many e-commerce platforms increasing their rental space during this period [9][10]. 2. **Cross-Border E-commerce Trends**: The logistics market is also adapting to the needs of cross-border e-commerce, particularly in the southern regions, which are seeing increased warehouse integration and layout adjustments [9][11]. 3. **Market Resilience**: Despite the challenges, the logistics real estate market in regions like Guangdong remains robust, with a healthy occupancy rate of around 6% [46]. 4. **Long-term Adjustments**: The market is expected to stabilize as supply and demand reach a more balanced state, with some regions potentially seeing a rebound in rental prices as occupancy improves [40][41]. This summary encapsulates the key insights from the conference call, highlighting the current state and future outlook of the logistics real estate market in China.

Core Viewpoint - The company announced a reduction in capital for its subsidiary, Zhangjiagang Free Trade Zone Foreign Investment Service Co., Ltd. (referred to as "Foreign Service Company"), which will eliminate the current and potential competition with its controlling shareholder, JG Free Trade Zone Jinguang Asset Management Group Co., Ltd. [1][2] Summary by Sections 1. Overview of Related Transactions - The Foreign Service Company has a registered capital of RMB 467.33 million, with the company holding 54.004% and Jinguang Asset holding 45.996% [1][2] - The company plans to unilaterally reduce its capital in the Foreign Service Company by RMB 37.42 million, resulting in a new registered capital of RMB 429.91 million, with both the company and Jinguang Asset holding 50% equity each [1][2] 2. Related Party Introduction - Jinguang Asset is the controlling shareholder of the company, and the transaction constitutes a related party transaction but does not qualify as a major asset restructuring [2][3] - The company has had one related transaction with Jinguang Asset in the past 12 months, amounting to RMB 65.66 million [2][9] 3. Financial Overview of the Foreign Service Company - As of March 31, 2025, the Foreign Service Company reported total assets of RMB 631.98 million and net assets of RMB 598.58 million [4] - For the first quarter of 2025, the company generated revenue of RMB 16.89 million and a net profit of RMB 4.24 million [4] 4. Valuation and Pricing of the Transaction - The transaction price of RMB 65.66 million was determined based on an asset appraisal report, with the net asset value of the Foreign Service Company assessed at RMB 59.43 million [5][7] - The valuation methods included the asset-based approach and the income approach, with the asset-based approach being selected due to its reliability in reflecting the company's market value [5][7] 5. Agreement and Execution of the Capital Reduction - The capital reduction will be executed through legal procedures, with the company paying the reduction price in cash [6][8] - The company will modify its articles of association and update the shareholder register following the completion of the capital reduction [8] 6. Impact of the Transaction on the Company - The capital reduction will resolve the competition issue between the company and Jinguang Asset, and the long-term equity investment in the Foreign Service Company will shift from the cost method to the equity method [9] - It is expected that the company's net profit attributable to shareholders will increase by approximately RMB 65 million in 2025 due to this transaction [9]

Core Insights - The article emphasizes the significant advancements in Shanghai's warehousing industry by 2025, focusing on digitalization, intelligence, and sustainability as key trends [2][8]. Group 1: Intelligent Warehousing - Duolong Logistics serves as a benchmark for intelligent warehousing, achieving a comprehensive upgrade in operations through the introduction of smart warehousing management systems [2]. - The company implemented automation and intelligent systems, such as Automated Guided Vehicles (AGVs) and smart shelves, which reduced manual intervention and error rates while enhancing picking and outbound efficiency [2][3]. - Data-driven decision-making allows Duolong Logistics to accurately forecast inventory needs, optimize layout, and minimize stockpiling and stockout risks [2][3]. Group 2: Supply Chain Optimization - Another Shanghai warehousing company improved inventory turnover rates significantly by optimizing supply chain management through deep collaboration with upstream and downstream partners [3]. - The company utilized historical sales data and market trends for precise demand forecasting, preventing over-purchasing [3]. - Establishing regional warehousing nodes shortened delivery distances, thereby enhancing customer satisfaction [3]. Group 3: Integrated Warehousing and Distribution - A company focusing on integrated warehousing and distribution achieved comprehensive logistics efficiency by consolidating storage and delivery resources [5]. - The optimization of warehousing layout and delivery routes led to reduced logistics costs and time losses [5]. - Providing customized warehousing and delivery solutions based on customer needs increased customer loyalty [5]. Group 4: Green Warehousing - A Shanghai warehousing company incorporated green logistics principles into operations, significantly reducing carbon emissions through the use of eco-friendly materials and optimized energy usage [6]. - The installation of solar panels and energy-saving devices in warehouses contributed to lower energy consumption [6]. - The promotion of recyclable and reusable packaging materials helped minimize resource waste [6]. Group 5: Digital Transformation - A warehousing company achieved transparency and efficiency in management through comprehensive digital transformation, utilizing blockchain technology and IoT devices [7]. - The application of blockchain technology ensured the immutability and transparent sharing of warehousing data, enhancing customer trust [7]. - Real-time monitoring of storage environments and equipment status via IoT devices reduced equipment failures and warehousing losses [7]. Conclusion and Implications - The practical cases from Shanghai's warehousing industry in 2025 highlight that intelligence, sustainability, and digitalization are the three major trends shaping the future of warehousing [8][9]. - Companies aiming for success in warehousing operations should focus on the integration of technological innovation, data-driven strategies, and green principles [9].

Group 1 - The core viewpoint is that China's warehousing industry continues to show a positive operational trend, with the warehousing index for June at 51%, an increase of 0.5 percentage points from the previous month, marking eight consecutive months in the expansion zone [1][2] - Key sub-indices such as new orders, business profit, average inventory turnover, and business activity expectations have all risen, with increases ranging from 0.7 to 3.3 percentage points, indicating continued demand expansion in warehousing services [1][2] - The end-of-period inventory index has decreased by 0.4 percentage points, reflecting companies' proactive inventory reduction efforts [1][2] Group 2 - Overall, the second quarter of 2023 saw the Chinese warehousing industry maintain the expansion trend observed in the first quarter, with the warehousing index consistently in the expansion zone throughout the first half of the year [2] - The new orders index has remained in expansion for six consecutive months, indicating stable growth in overall business demand [2] - The business activity expectations index has consistently maintained a high level of optimism, suggesting that companies are confident about future market conditions [2]

Core Viewpoint - The Chinese warehousing index for June is 51%, indicating continuous expansion for eight months, reflecting a positive trend in the warehousing industry [1] Summary by Categories Overall Index Performance - The warehousing index for June stands at 51%, which is an increase of 0.5 percentage points from the previous month, maintaining a position in the expansion zone [1] Sub-index Performance - New orders index for June is 51.6%, up by 0.7 percentage points from last month, indicating active demand in warehousing services and continued growth in new order volume [1] - Key sub-indices such as average inventory turnover, business profits, and business activity expectations have also shown recovery [1] Sector-specific Insights - Demand for warehousing services in consumer goods is particularly strong, with significant increases in new orders for categories like food, home appliances, and agricultural products [1]

Investment Rating - The report does not explicitly provide an investment rating for the general warehousing industry in China. Core Insights - The report reflects the dynamics of the general warehousing market in China, summarizing supply and demand trends, rental levels, and vacancy rates across 41 major logistics cities [5][7][40]. Summary by Sections 1. General Warehousing Demand Situation - The eastern region is the main demand driver, with a significant portion of demand for smaller warehouse spaces [17][21]. - In May 2025, the largest share of leasing demand was for warehouses under 1,000 m², accounting for 42.86% of total demand [21]. 2. General Warehousing Supply Situation - In May 2025, the new supply of general warehouses was 517,000 m², a decrease of 36.17% month-on-month and 55.92% year-on-year [25][30]. - New supply was primarily concentrated in the eastern region, with major contributions from cities like Tianjin, Shenyang, and Beijing [30]. 3. Warehousing Land Transaction Situation - There were 36 land transactions for warehousing in 41 key cities, covering an area of 3,110.5 acres, with a total transaction value of 1.69 billion yuan, reflecting a significant increase of 209.77% month-on-month [33][36]. 4. General Warehousing Rental and Vacancy Rate Analysis - The average rental rate in May 2025 was 23.18 yuan/m²/month nationally, showing a decline, while the vacancy rate increased to 16.43% [40][41]. - The average rental rate in 41 cities was 23.67 yuan/m²/month, also reflecting a decrease, with a vacancy rate of 14.88% [40][41]. 5. Regional Rental and Vacancy Rate Analysis - **Northeast Region**: Average rental was 15.90 yuan/m²/month, with a vacancy rate of 21.78% [48][65]. - **Eastern Region**: Average rental was 30.38 yuan/m²/month, with a vacancy rate of 16.73% [52][71]. - **Central Region**: Average rental was 20.49 yuan/m²/month, with a vacancy rate of 10.11% [57][73]. - **Western Region**: Average rental was 18.31 yuan/m²/month, with a vacancy rate of 8.71% [62][79]. 6. Recommendations for Quality Warehousing Sources - The report includes recommendations for high-standard warehouses across various regions, highlighting their features and strategic locations [83][85][91].

Group 1 - Xi Jinping met with the 10th Panchen Lama, encouraging him to promote national unity and stability in Tibet [4] - Xi Jinping held a phone conversation with US President Trump [5] - Xi Jinping sent a congratulatory message to Poland's newly elected President, Karol Nawrocki [6] - Chinese Premier Li Qiang spoke with Canadian Prime Minister Justin Trudeau [7] Group 2 - Various regions in China are actively promoting the "first launch economy" to stimulate new consumer vitality [9] - Local governments are implementing multiple measures to stabilize foreign trade and support enterprises in securing orders and expanding markets [11] Group 3 - The logistics and warehousing sector in China is experiencing growth, with the warehousing index at 50.5%, indicating expansion for seven consecutive months [17] - Guangdong's marine economy reached a GDP of 2 trillion yuan, accounting for 19% of the national marine economy [24] - The Baotou-Yinchuan high-speed railway's Inner Mongolia section has completed track laying, facilitating faster travel between the two cities [25]

Core Viewpoint - The China Warehousing Index for May 2025 is reported at 50.5%, a slight decrease of 0.2 percentage points from April, indicating a stable expansion in the warehousing industry despite the decline [1][3]. Summary by Categories Warehousing Index - The China Warehousing Index remains above 50% for the year, reflecting a stable and positive operational trend in the warehousing sector [1][3]. New Orders - The new orders index for May is at 50.9%, down 1.5 percentage points from April. Various categories such as steel, machinery, and food have new orders indices above 50%, while categories like non-ferrous metals and pharmaceuticals are below 50% [1][2]. Facility Utilization - The facility utilization index increased to 54.1%, up 2.9 percentage points from April. Categories such as steel, chemicals, and food show utilization rates above 50%, while non-ferrous metals and home appliances are below this threshold [1][2]. Inventory Levels - The ending inventory index is at 48.1%, an increase of 2 percentage points from April. Categories like steel and daily necessities have indices above 50%, while non-ferrous metals and agricultural products are below [2]. Inventory Turnover - The average inventory turnover index is at 52.4%, down 0.8 percentage points from April. Most categories maintain turnover indices above 50%, indicating efficient goods turnover [2]. Pricing and Employment - The pricing index for services is at 50.9%, up 0.3 percentage points from April. The employee index is at 51.4%, down 1 percentage point, while the business activity expectation index is at 52.8%, down 0.9 percentage points [2]. Future Outlook - The warehousing sector is expected to continue its stable growth due to the implementation of economic stabilization policies, with demand anticipated to remain steady [3].

Core Viewpoint - The China Logistics and Purchasing Federation reported that the warehousing industry in China remains stable and positive, with continued growth in demand and active business activities in May, as indicated by the warehousing index of 50.5%, which is a slight decrease of 0.2 percentage points from the previous month [1] Summary by Sections Warehousing Index - The warehousing index for May stands at 50.5%, indicating that it has remained in the expansion zone for seven consecutive months [1] - The new orders index remains in the expansion zone, reflecting strong demand in warehousing services, particularly for food, agricultural products, home appliances, and daily necessities [1] Employment and Utilization - The employee index for May is at 51.4%, indicating a continuous increase in the number of employees in the warehousing sector for three consecutive months [1] - The facility utilization rate index increased by 2.9 percentage points to 54.1%, showing improved utilization of warehousing facilities [1] Business Activity and Expectations - The average inventory turnover index and business activity expectation index are both operating at high levels, indicating active warehousing business activities and improved goods turnover efficiency [1] - The smooth connection of supply chains and optimistic business expectations suggest that the warehousing demand is likely to continue to be released steadily in the future [1]

Economic Activity - Economic activity has slightly declined since the last report, with half of the Federal Reserve districts reporting a moderate decline [1] - Three Federal Reserve districts reported no change, while three reported slight growth [1] Uncertainty and Consumer Behavior - All Federal Reserve districts reported an increase in economic and policy uncertainty, leading to hesitancy in decision-making among businesses and households [1] - Consumer spending reports were mixed, with most districts indicating slight declines or no change, although some reported increased spending on items affected by tariffs [1] Manufacturing and Real Estate - Manufacturing activity has seen a slight decline [1] - Residential real estate sales remained nearly unchanged, with most districts reporting stable or slowing new home construction activity [1] Banking and Transportation - Reports on bank loan demand and capital expenditure plans were mixed [1] - Port activity was strong, while transportation and warehousing activities reported mixed results across different regions [1] Overall Outlook - The overall economic outlook remains slightly pessimistic and uncertain, with no change compared to the last report [1] - Some districts indicated a worsening outlook, while others reported improvements [1]