Core Viewpoint - The report from Caitong Securities highlights that China Merchants Energy Shipping Company is a global leader in comprehensive shipping, with a high proportion of oil and bulk carriers, and has established a resilient shipping platform through mergers and acquisitions, reducing risks associated with single business cycles [1] Group 1: Company Overview - China Merchants Energy Shipping Company has built a comprehensive shipping business structure focusing on oil and gas bulk carriers, which mitigates risks from strong cyclical operations [1] - The company primarily operates with self-owned vessels, accounting for 91.5% of its fleet [1] Group 2: Fleet and Market Position - As of June 2025, the company will have 52 VLCCs and 37 VLOCs (including 3 managed vessels), ranking first globally in both categories [1] - The company also operates 19 Capesize vessels, including 3 on lease [1] Group 3: Market Dynamics - The current market is in a favorable cycle, with the company's VLCCs benefiting from scale and operational advantages, leading to superior profit elasticity [1] - Demand is supported by an expansion cycle and tightening sanctions in Europe and the U.S., while supply-side constraints exist due to insufficient new VLCC orders (10.6% of current orders) to replace aging vessels (20% are 21 years or older) [1] - The dynamic scrapping of older vessels and absorption into the gray market may limit the net increase in compliant effective capacity, suggesting sustained market conditions [1] Group 4: Investment Rating - The company is expected to benefit from a resonance in oil and bulk shipping markets, leading to an initial coverage rating of "Buy" [1]

Core Viewpoint - CMB is positioned as a global leader in comprehensive shipping, with a high proportion of oil and bulk carriers, reducing operational risks associated with single business cycles [1] Group 1: Business Structure and Strategy - The company has established a comprehensive shipping business structure through mergers and acquisitions, focusing on "oil and gas bulk carrier integration" [1] - The current fleet is primarily owned (91.5% ownership), with a total of 52 VLCCs and 37 VLOCs, ranking first globally, and 19 Capesize vessels [1] Group 2: Market Conditions and Performance - The company is currently in a favorable market cycle, with VLCCs benefiting from scale and operational advantages, leading to superior profit elasticity [1] - Demand is supported by an expansion cycle and tightening sanctions from Europe and the U.S., while supply-side constraints exist due to insufficient new VLCC orders to replace aging vessels [1] Group 3: Future Outlook - The company is expected to experience a positive market trend due to the resonance of oil and bulk shipping, with a projected limited net increase in compliant effective capacity due to the aging fleet [1] - The company has been given an "overweight" rating based on the anticipated favorable market conditions [1]