Investment Rating - The investment rating for the company is Neutral [4][16]. Core Views - The company's Q3 performance exceeded expectations, but there was a year-on-year decline in revenue and net profit. For the first three quarters of 2025, the company reported revenue of 167.6 billion RMB, a decrease of 4.1% year-on-year, and a net profit of 27.07 billion RMB, down 29.0% year-on-year. In Q3 alone, revenue was 58.5 billion RMB, down 20.4% year-on-year, and net profit was 9.53 billion RMB, down 55.1% year-on-year [1][7]. - The company's container shipping volume showed positive growth year-on-year, with a total of 6.9 million TEUs shipped in Q3, an increase of 4.9%. However, the supply-demand imbalance led to a significant decline in shipping rates, with the average CCFI down 39.5% year-on-year [1][10]. - The port business demonstrated steady growth, achieving a throughput of 113.28 million TEUs in the first three quarters of 2025, up 5.6% year-on-year. The throughput from controlled terminals was 25.04 million TEUs, an increase of 2.0% [2][10]. - The company is focused on shareholder returns, having distributed a mid-term dividend of 0.56 RMB per share, representing 50% of its net profit for the first half of the year. Additionally, a new share buyback plan has been announced, aiming to repurchase between 50 million to 100 million shares at a price not exceeding 14.98 RMB per share, with an expected total amount of 749 million to 1.498 billion RMB [2][12]. Financial Forecasts - The company forecasts revenue for 2025 to be 218.66 billion RMB, a decrease of 6.5% year-on-year, with net profit expected to be 31.08 billion RMB, down 36.7% year-on-year. The earnings per share (EPS) is projected to be 2.01 RMB [3][14]. - The EBIT margin is expected to be 15.6% in 2025, with a return on equity (ROE) of 12.4% [3][14]. - The company anticipates a gradual recovery in net profit for 2026 and 2027, with estimates of 23.29 billion RMB and 22.07 billion RMB respectively [13].

Core Viewpoint - The company reported a decline in revenue and net profit for the first three quarters of 2025, with a significant drop in Q3 performance, while also announcing a share buyback plan to enhance shareholder value [1][5]. Financial Performance - Revenue for the first three quarters of 2025 was 167.6 billion yuan, down 4.1% year-on-year; Q3 revenue was 58.5 billion yuan, down 20.4% year-on-year but up 14.4% quarter-on-quarter [1]. - Net profit attributable to shareholders for the first three quarters was 27.07 billion yuan, down 29% year-on-year; Q3 net profit was 9.53 billion yuan, down 55.1% year-on-year but up 63.2% quarter-on-quarter [1]. - Excluding non-recurring items, net profit for the first three quarters was 26.97 billion yuan, down 29.1% year-on-year; Q3 was 9.50 billion yuan, down 55.3% year-on-year but up 63.1% quarter-on-quarter [1]. Business Segments - In Q3, the estimated revenue from container shipping was approximately 56.23 billion yuan, down 21.2% year-on-year, while supply chain revenue (excluding shipping) was 11.31 billion yuan, up 4.8% year-on-year [3]. - Container shipping line revenue was 51.78 billion yuan, down 23% year-on-year but up 15% quarter-on-quarter; performance varied across routes, with significant declines in trans-Pacific and Asia-Europe routes [3]. - Q3 container volume was 6.903 million TEU, up 4.9% year-on-year and 1.5% quarter-on-quarter [3]. Pricing and Cost Analysis - The average revenue per container in Q3 was 1,052 USD/TEU, down 27% year-on-year but up 14% quarter-on-quarter; foreign trade container revenue was 1,276 USD/TEU, down 26% year-on-year but up 16% quarter-on-quarter [3]. - Estimated cost per container in Q3 was approximately 879 USD/TEU, down 2.3% year-on-year, resulting in a gross profit of 263.9 USD/TEU, down 57.7% year-on-year [3]. Profitability Metrics - Q3 EBIT margin for container shipping was approximately 20.9%, down 18.4 percentage points year-on-year but up 7.1 percentage points quarter-on-quarter; net profit margin was 16.2%, down 15.7 percentage points year-on-year but up 5.6 percentage points quarter-on-quarter [4]. - Terminal business revenue in Q3 was 3.08 billion yuan, up 8.1% year-on-year, with a gross margin of 26.0%, down 2.9 percentage points year-on-year [4]. Market Outlook - For Q4, expectations are for price support in main shipping routes due to reduced capacity and upcoming contract renewals, despite concerns over geopolitical events affecting shipping routes [4]. - The company maintains a positive outlook on the value of leading container shipping networks, supported by a strong balance sheet and stable shareholder returns [5]. Valuation and Investment Recommendations - The company is projected to have net profits of 31.04 billion, 20.23 billion, and 21.78 billion yuan for 2025-2027, with corresponding PE ratios of 7, 11, and 11 times [5]. - Current valuations for H and A shares are seen as having a safety margin, with significant pessimistic expectations already priced in [6].

Core Insights - The company reported a revenue of 109.1 billion RMB for the first half of 2025, representing a year-on-year increase of 7.8%, but the Q2 revenue was 51.14 billion RMB, showing a decline of 3.4% year-on-year and 11.8% quarter-on-quarter [1] - The net profit attributable to shareholders for the first half was 17.54 billion RMB, up 3.9% year-on-year, while Q2 net profit was 5.84 billion RMB, down 42.2% year-on-year and 50% quarter-on-quarter [1] - The company announced a mid-term cash dividend of 8.67 billion RMB, with a payout ratio of 50%, and repurchased shares worth 4.185 billion RMB, accounting for approximately 2.2% of the total share capital [1] Revenue Analysis - In Q2 2025, the estimated revenue from the container shipping business was approximately 48.92 billion RMB, a decrease of 4% year-on-year, with supply chain revenue (excluding shipping) at 10.73 billion RMB, an increase of 3% [2] - Container shipping line revenue was 44.9 billion RMB, down 5% year-on-year and 13% quarter-on-quarter, with specific routes showing varied performance [2] - The Q2 box volume was 6.799 million TEU, reflecting a year-on-year increase of 6% and a quarter-on-quarter increase of 5% [2] Cost and Profitability - The Q2 container shipping business had a single box cost of 868 USD/TEU, which is a 6% increase year-on-year and a 1% decrease quarter-on-quarter [3] - The Q2 EBIT margin for container shipping was 13.8%, down 11 percentage points year-on-year and 12.6 percentage points quarter-on-quarter [4] Market Outlook - The company anticipates that freight rates may remain within a certain profitable range with seasonal fluctuations, expecting Q3 freight rates to be high initially and then decline [4] - Attention is drawn to the adjustments in capacity and route networks among shipping companies following the implementation of the U.S. 301 "tariff" policy, as well as the final outcomes of global tariff changes [4] - The company maintains a positive long-term outlook on the value of state-owned enterprise container shipping leaders, emphasizing the importance of quality assets and stable shareholder returns [4] Profit Forecast and Investment Recommendations - The company maintains profit forecasts for 2025-2027 at 28.29 billion, 18.91 billion, and 21.06 billion RMB, corresponding to PE ratios of 8, 13, and 11, and PB ratios of 0.94, 0.89, and 0.85 [5] - The current PB is significantly lower than pre-pandemic levels, indicating a large degree of pessimism regarding the recovery of the Red Sea shipping routes and capacity delivery [5] - The estimated dividend yield for 2025 is 7% for H shares and 6% for A shares, with a "recommended" rating maintained [5]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The report indicates that pessimistic expectations have been fully released, and the oil and bulk shipping sectors are experiencing a recovery trend [10] - In Q1 2025, the company's operating revenue was 5.6 billion yuan, a year-on-year decrease of 10.5%, while the net profit attributable to the parent company was 870 million yuan, down 37.1% year-on-year [5][10] Summary by Sections Business Performance - The container shipping segment benefited from increased freight rates on Southeast Asia routes following the Red Sea incident, leading to a good performance [10] - The oil tanker segment faced pressure due to high base effects from the previous year and lower freight rates at the end of last year, resulting in a decline in performance [10] - The bulk shipping segment saw a decline in freight rates due to disruptions in iron ore and bauxite shipments, with the VLOC fleet maintaining resilience through COA contracts, while Panamax vessels struggled due to low South American grain shipments [10] Revenue and Profit Analysis - In Q1, the oil shipping business generated revenue of 2.14 billion yuan, down 16.3% year-on-year, with a net profit of 490 million yuan, down 44.0% year-on-year [6] - The dry bulk shipping business achieved revenue of 1.68 billion yuan, down 11.4% year-on-year, with a net profit of 160 million yuan, down 55.5% year-on-year [10] - The container shipping business reported revenue of 1.14 billion yuan, up 9.6% year-on-year, and a net profit of 340 million yuan, up 222.1% year-on-year [10] Market Outlook - The report suggests that the pessimistic expectations have been fully released, and the industry is on an upward trend, with potential for a synchronized recovery in oil and bulk shipping [10] - Future performance is expected to improve, with projected revenues of 6.3 billion, 6.6 billion, and 7.0 billion yuan for 2025, 2026, and 2027 respectively, corresponding to PE ratios of 7.9, 7.5, and 7.1 times [10]