COSCO SHIPPING: To build a world-class merchant fleet of major countries

In 2021, the new crown epidemic is repeated, the demand for transportation is growing, and the supply of transportation capacity is limited... The global logistics supply chain continues to be challenged and impacted by complex situations such as port congestion, container shortages, and inland transportation delays, and the supply and demand relationship of container transportation continues to be tense. In this context, COSCO Shipping Holdings issued a performance forecast, and the performance of the first quarter increased significantly. The company expects to achieve a net profit attributable to the mother of 27.6 billion yuan in the first quarter, an increase of about 78.6% year-on-year.

On the evening of March 30, COSCO Shipping Holdings released its 2021 annual report. According to the report data, the company achieved revenue of 333.694 billion yuan, an increase of 94.85% year-on-year; net profit attributable to the mother of 89.296 billion yuan, an increase of 799.52% year-on-year; basic earnings per share of 5.59 yuan / share, an increase of 801.61% year-on-year.

This is the best operating performance in the history of COSCO Offshore Holdings. More insiders assert that the shipping industry will usher in the upper cycle.

It has established an international leading position

COSCO Shipping Holdings is the flagship enterprise and capital platform of China COSCO Shipping Group Co., Ltd. (hereinafter referred to as "COSCO Group"), the main business of shipping and terminal operation. In 2005 and 2007, the company was listed on the Main Board of the Hong Kong Stock Exchange and the Shanghai Stock Exchange.

In 2015, China Cosco announced a restructuring plan to acquire 33 business networks of CNOOC Container For RMB1.14 billion, charter and operate CNAS container ships and containers, and sell dry bulk shipping assets to COSCO Group for RMB6.77 billion, becoming a listing platform focusing on container shipping services.

The following year, China COSCO changed its name to COSCO Offshore. In that reorganization, the core action of COSCO Shipping Holdings was to divest the dry bulk cargo transportation business and integrate container transportation. By the end of 2016, COSCO Shipping Has become the world's fourth largest container shipping company, with a self-operating capacity of 312 vessels and 1.6888 million TEUs, and a year-on-year increase of 85.9%.

The characteristics of the containership business make it much less responsive to economic fluctuations. On the one hand, the buyers of the containership business are extremely scattered, mostly shippers from all over the world, and the seller is a container liner company that controls most of the transportation capacity, and the industrial discourse power is concentrated on the seller; on the other hand, the container shipping has a very high entry threshold, and it is necessary to lay out the route and sign a ship contract with the port, etc., and the advantages of the head enterprise are difficult to be replaced.

However, it is worth noting that economic fluctuations are not completely unaffected by the consolidation business, and the most typical performance is that Maersk's stock price still shows obvious cyclical changes. Therefore, in the years after 2016, cosco Shipping's profit performance did not have much of a bright spot. However, there have been some key changes in the collective operation industry in recent years, the most prominent point is that there have been many large-scale mergers and acquisitions and reorganizations in the industry, the concentration has been significantly improved, and the self-discipline of the container transportation alliance has been enhanced.

As a leading enterprise in the collective operation industry, COSCO SHIPPING is also facing a series of problems such as business changes, strategic adjustments and higher debt ratios. However, fortunately, cosco Shipping Holdings' strategic development in recent years has continued to be on the right path, strengthening its internationalization and branding capabilities through the acquisition of OOCL, establishing a new Silk Road to Europe through the combination of dots and lines, and gradually consolidating its international leading position by acquiring the port of Belgium, Spanish ports and railway companies, and reconstructing the European route network through the China-Europe Land-Sea Express and diamond routes. At present, the terminal portfolio of COSCO SHIPPING Ports covers the five major port groups along the coast of China, major overseas hub ports such as Europe, South America, the Middle East, Southeast Asia and the Mediterranean. As of December 31, 2021, COSCO SHIPPING Ports has invested in 46 terminals in 37 ports around the world, operating a total of 367 berths, including 220 container berths, with a total annual capacity of 141 million TEUs.

Technology and ecology are integrated

COSCO Offshore Holdings is committed to building an integrated land-sea operation model, making every effort to ensure the stability and smoothness of the global industrial chain and supply chain, and providing customers with more reliable and secure "end-to-end" services. According to the annual report, COSCO Shipping Holdings has continuously strengthened the development of goods sources in the hinterland of Europe, and the volume of China-Europe land-sea express container has increased by 23% year-on-year; 29 new sea-rail domestic and foreign trade channels have been added, and the Hunan-Guangdong non-railway-sea combined transport and the new land-sea corridor from the Greater Bay Area to the west have been successfully put into operation.

At the same time, COSCO Offshore Holdings also joined hands with other members of the Ocean Alliance to successfully release the DAY5 route products with wider coverage, better quality, faster delivery and more stable service, involving 39 routes and 4.1 million TEU capacity of the alliance. At the same time, the company continues to improve the operational efficiency of the dual-brand fleet. In 2021, the average weekly capacity of the trans-Pacific route increased by about 26% year-on-year, and the average weekly capacity of the Asia-Europe route increased by about 6% year-on-year.

COSCO Offshore Holdings also gives full play to the advantages of technological upgrading and leads the integration of digital ecology. According to the latest annual report data, the core products of the global shipping business network have been put into production and application in 11 ports at home and abroad, and have achieved "paperless release" in many countries and regions such as Hong Kong, Singapore and Thailand, which greatly simplifies the data exchange method, ensures the customer service experience, and steadily enhances the influence of the industry.

Another event is more worthy of attention, on March 19, 2022, the heavy crane ship "Dachang" loaded with the first module of the Saipem Senegal project set sail from the Indonesian port of Karimun, marking the COSCO SHIPPING special transport heavy crane fleet and semi-submersible fleet joining hands to form an overall force to the high-end transportation market. The Saipem Senegal project is the company's first "heavy crane + semi-submersible" module transportation project. In the bidding process of the project, COSCO SHIPPING Special Transport gave full play to the company's multi-vessel advantages, creatively proposed the "heavy crane + semi-submersible ship" combined transport solution, fully demonstrated the company's strong strength in the overall logistics program design and resource integration, and finally successfully won the project shipping general contract. The project has high technical and loading requirements, especially the heavy lifting ship execution oil company project, which faces challenges in many aspects. For example, punctual power arrangement, professional technical literacy, rapid service response and so on.

COSCO Offshore Also has its own self-built cloud data center computer room, which is currently the main service group and its affiliated units, which will also bring certain profit contributions to the company.

Invest in the construction of major ports to enhance the core strength

According to the main business, COSCO Offshore Control expands around customer needs and adopts a channel-based and regionalized management model. Mainly through the advantages of the rich container liner route network and port network at home and abroad, the port-shipping linkage and sea-rail connection are strengthened, and high-quality end-to-end logistics solutions are provided for global customers. COSCO Offshore has signed long-term cooperation agreements with a series of customers to provide more comprehensive logistics services.

COSCO Offshore Also launched the "Midea Full Process Customization Service Project" to solve the problems encountered by customers such as insufficient integration of supply chain management, low efficiency of logistics operations, and need to be improved in digital level. At present, the multi-dimensional collaboration of teams, programs, processes and information has been realized, and the digital operation ecology of the supply chain has taken shape.

At the same time, COSCO Haikong aims to achieve 30%-35% of the overall business in the next three years in the end-to-end business, and the proportion of end-to-end business volume has reached 15%-20%.

COSCO SHIPPING Port continues to invest in the construction of supporting logistics projects in major ports, on the domestic side, in the Nantong Port supporting the rear logistics park, in the Wuhan Port investment in iron-water intermodal transport projects, etc.; foreign side, in Abu Dhabi Port and Zeebrugge Port investment in CFS station (container freight station) construction, strengthen the logistics and warehousing capacity around the port.

COSCO SHIPPING Port continues to invest in major ports around the world, and after obtaining the right to operate, it not only provides simple ship reception, cargo loading and unloading services, but also continues to extend its business to port warehousing and logistics transportation, build a logistics network with the supply chain platform as the link, expand service categories, and further attract and retain maritime customers. In the past five years, there have been more than 10 port terminal investment projects, and the holding ratio of invested terminals has been continuously increased, and the total throughput of COSCO SHIPPING Port is currently the first in the world and the equity throughput is second in the world.