COSCO SHIPPING Specialized Carriers 2025 Annual Report Analysis: Revenue Increased by 38.32% to 23.21B yuan, Operating Cash Flow Surged by 75.31%

Revenue Analysis

In 2025, COSCO SHIPPING Specialized Carriers achieved operating revenue of 23,210,557,897.17 yuan, a year-on-year increase of 38.32%. The revenue growth mainly stems from the company’s expansion of transportation capacity, with a total of 50 new ships added throughout the year. By the end of the year, the controlled fleet size reached 198 ships and 9.1185 million deadweight tons, a 48% increase, over 200% growth since the beginning of the “14th Five-Year Plan.” The multi-purpose heavy-lift vessel fleet, new multi-purpose fleet, and semi-submersible fleet lead globally; the asphalt fleet ranks among the top; the auto fleet is accelerating toward the first tier.

In terms of business segments, shipping business revenue was 21,591,078,902.93 yuan, up 40.64%, accounting for 93.02% of total revenue; non-shipping business revenue was 1,619,478,994.24 yuan, up 13.39%, accounting for 6.98%. Looking at ship types, auto ship revenue was 4,401,399,456.54 yuan, a significant increase of 213.59%, becoming a key driver of revenue growth; revenue from heavy-lift ships, new multi-purpose ships, and multi-purpose ships increased by 44.38%, 35.15%, and 13.16% respectively; semi-submersible ships and asphalt ships saw revenue growth of 9.82% and 10.38%; wood cargo ships’ revenue decreased by 14.36%.

Net Profit Analysis

In 2025, the company achieved net profit attributable to shareholders of the listed company of 1,779,972,016.00 yuan, a year-on-year increase of 16.29%. Despite significant revenue growth, the net profit growth rate was lower than revenue growth, mainly because operating costs increased by 39.37% year-on-year, slightly exceeding revenue growth, which put some pressure on overall profitability. However, the company optimized fleet structure and improved operational efficiency, maintaining steady net profit growth.

Net Profit Excluding Non-Recurring Gains and Losses

Net profit attributable to shareholders after deducting non-recurring gains and losses was 1,747,924,249.81 yuan, up 34.65% year-on-year, significantly higher than the net profit growth rate. This mainly benefits from the improvement in core profitability, as the non-recurring items are excluded, better reflecting the company’s core business profitability. It indicates that the company’s core competitiveness in the specialized shipping sector continues to strengthen, and the quality of core earnings remains positive.

Basic Earnings Per Share Analysis

Basic earnings per share were 0.686 yuan/share, down 3.79% year-on-year. The decline in EPS is mainly due to the company’s issuance of additional common shares to specific targets in 2025, with a total of 597,269,624 shares issued. The total share capital increased from 2,146,650,771 shares to 2,743,920,395 shares, leading to dilution of earnings per share.

Diluted Earnings Per Share Analysis

Earnings per share after deducting non-recurring gains and losses was 0.674 yuan/share, up 11.40% year-on-year. The growth in EPS after deducting non-recurring items is mainly driven by the substantial increase in net profit after non-recurring items. Despite the expansion of share capital, the growth in core business profitability has led to positive growth in EPS, further demonstrating the company’s resilience in core earnings.

Expense Analysis

In 2025, the company’s total operating expenses were 1,893,706,266.38 yuan, up 12.74%, lower than revenue growth, indicating effective cost control. Among these, selling expenses, management expenses, financial expenses, and R&D expenses accounted for 4.21%, 62.47%, 28.28%, and 5.05% respectively.

Selling Expenses Analysis

Selling expenses amounted to 79,640,949.26 yuan, up 14.05%. The increase is mainly due to the expansion of transportation capacity, which led to higher employee compensation, travel expenses, and other costs. In terms of composition, employee compensation accounted for the largest proportion at 90.80%, followed by other expenses at 3.74%. The growth of selling expenses roughly matches the company’s business expansion pace.

Management Expenses Analysis

Management expenses were 1,183,000,358.58 yuan, up 19.70%. The increase mainly reflects the growth in business scale, with corresponding increases in labor costs and travel expenses. Employee compensation was the main component, accounting for 75.23%, followed by travel expenses at 3.88% and depreciation at 3.78%. The increase in management expenses is reasonable given the company’s scale expansion.

Financial Expenses Analysis

Financial expenses totaled 535,424,015.02 yuan, up 19.80%. The growth is mainly due to the increase in long-term lease ships during the reporting period, which led to higher lease interest expenses. Interest expenses were 639,272,746.26 yuan, up 29.64%, while interest income was 110,879,255.06 yuan, up 155.57%. The rise in interest income offset part of the increased interest expenses.

R&D Expenses Analysis

R&D expenses were 95,640,943.52 yuan, down 34.47%. The decrease is mainly due to lower R&D personnel costs and project expenditures during the reporting period. R&D investment amounted to 95,640,943.52 yuan, representing 0.41% of operating revenue, with a capitalization ratio of 0.00%.

R&D Personnel Information

The company has 250 R&D personnel, accounting for 4.97% of total staff. The educational structure includes 3 PhDs, 73 master’s degree holders, 130 undergraduates, 39 college diploma holders, and 5 high school or below. Over 82.40% hold undergraduate degrees or higher, providing strong talent support for technological innovation. Age-wise, there are 23 under 30, 68 between 30-40, 73 between 40-50, and 86 between 50-60, indicating a balanced age distribution with both experienced senior researchers and young innovators.

Cash Flow Analysis

In 2025, the company’s net increase in cash and cash equivalents was 3,241,199,475.89 yuan, up 135.30%. The net cash flow from operating activities increased significantly, while cash outflows from investing activities rose sharply, and financing cash outflows decreased. The overall cash flow structure reflects the company’s expansion and fleet upgrade strategies.

Net Cash Flows from Operating Activities

Net cash flow from operating activities was 6,339,217,973.77 yuan, a 75.31% increase. This is mainly due to increased revenue during the reporting period, with cash inflows from operating activities rising to 23,166,855,600.30 yuan, up 41.31%. Additionally, the company strengthened cost management, resulting in a lower growth rate of cash outflows compared to inflows, greatly improving operating cash flow.

Net Cash Flows from Investing Activities

Net cash flow from investing activities was -2,388,688,883.14 yuan, turning from a net inflow of 103,689,177.12 yuan in the previous year to a net outflow. This is mainly due to increased payments for shipbuilding progress, with cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets reaching 1,661,533,359.10 yuan, up 161.17%, reflecting the company’s intensified capacity investment and fleet expansion.

Net Cash Flows from Financing Activities

Net cash flow from financing activities was -668,310,539.33 yuan, compared to -2,396,137,918.04 yuan in the previous year, indicating a significant reduction in cash outflows. This was mainly due to the company raising 3,476,933,798.91 yuan through private placement of shares, while debt repayment and dividend distribution expenses decreased, easing financing pressure.

Potential Risks

Macroeconomic and Geopolitical Risks

The current global political and economic landscape is undergoing profound adjustments, with uncertain macroeconomic recovery momentum and complex geopolitical tensions. Risks of regional friction and conflicts may disrupt local shipping routes, affecting global supply chain stability and the company’s vessel operations. The company needs to continuously improve routine monitoring and emergency response plans, optimize route networks dynamically, enhance fleet dispatch flexibility, strengthen communication with authorities and industry organizations, and reinforce vessel safety management systems.

Market Supply-Demand and Freight Rate Fluctuation Risks

Future marginal changes in capacity supply structure and seasonal or regional demand fluctuations may lead to adjustments in specific market segments, causing volatility in freight rates and charter prices. The company should adhere to prudent management principles, deepen strategic cooperation with core clients, solidify its fundamental position, conduct forward-looking market research, seize structural opportunities from global industry chain reconfiguration, and flexibly adjust capacity deployment and operational strategies to enhance resilience against market fluctuations.

Environmental Regulation Risks

International Maritime Organization (IMO) and EU regulations on greenhouse gas emissions and environmental compliance are tightening, with mandatory emission limits and carbon pricing mechanisms imposing higher requirements for decarbonization. This could increase costs related to fleet renewal, energy-saving upgrades, and compliance management. The company needs to embed green and low-carbon concepts into overall management, plan fleet capacity optimization and upgrades, promote environmentally friendly vessel types, deepen energy efficiency management, explore and reserve new energy-saving and emission reduction technologies, and steadily advance green fleet transformation.

High Fuel Price Cost Risks

Geopolitical conflicts may trigger sharp increases in oil prices, raising costs. The company can establish flexible freight rate mechanisms, include fuel surcharge clauses in COA contracts to hedge against oil price spikes, lock in fuel prices through bulk fixed-price procurement to reduce volatility, and increase floating-price procurement to smooth out price fluctuations.

Chairman’s Report on Pre-Tax Compensation

During the reporting period, Chairman Zhang Wei received a pre-tax total compensation of 3.0589 million yuan (including 2.7601 million yuan in salary and 0.2988 million yuan paid by the company for social insurance, enterprise annuities, supplementary medical insurance, and housing fund), mainly composed of base salary and performance-based annual salary, linked to company performance and personal duties.

General Manager’s Report on Pre-Tax Compensation

During the reporting period, General Manager Huang Nan received a pre-tax total compensation of 3.0004 million yuan (including 2.5161 million yuan in salary and 0.2843 million yuan paid by the company for social insurance, enterprise annuities, supplementary medical insurance, and housing fund), aligned with overall company performance and industry salary levels.

Deputy General Managers’ Pre-Tax Compensation

Deputy General Manager Cai Liancai received 2.5083 million yuan (including 2.2147 million in salary and 0.2936 million in social insurance, etc.); Deputy General Manager Gu Weidong (resigned in September 2025) received 2.0884 million yuan (including 1.8442 million in salary and 0.2442 million in social insurance); Deputy General Manager Zhang Chi received 2.4532 million yuan (including 2.1544 million in salary and 0.2988 million in social insurance); Deputy General Manager Tan Yan (appointed in November 2025) received 0.1997 million yuan (including 0.1767 million in salary and 0.0230 million in social insurance). Their compensation is determined based on their responsibilities, performance, and the company’s salary system, reflecting the principle of linking pay with responsibility and performance.

Financial Director’s Pre-Tax Compensation

Financial Director Li Jichun received 2.5796 million yuan (including 2.2808 million in salary and 0.2988 million in social insurance, etc.), with compensation linked to financial management effectiveness and operational performance, consistent with the company’s remuneration system.

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