Investment Value Analysis of China Merchants Steamship's Order for 4 x 3000TEU Container Vessels

Based on the collected data and information, I will provide a comprehensive analysis of the investment value of China Merchants Steamship’s strategic layout and connected transactions regarding its order for 4 x 3000TEU container vessels.

---

According to the latest announcement, China Merchants Steamship plans to sign a Vessel Building Agreement with a subsidiary of its connected party China Merchants Industry via its wholly-owned subsidiary to order 4 x 3000TEU conventional-fuel container vessels equipped with scrubbers[1]. The total investment of the project is expected not to exceed

, with the delivery period being [1]. This transaction constitutes a connected transaction, which needs to be submitted to the shareholders’ meeting for review, and the connected transactions with the same connected party in the past 12 months do not exceed RMB 1.8 billion[1].

Based on market reference data, the current newbuilding price of 3000TEU container vessels is approximately

(calculated based on the market reference price of USD 46-47 million per vessel), with a total cost of about RMB 1.32 billion for 4 vessels[2]. Considering that the project clearly includes scrubber configuration, the cost per vessel is slightly higher than that of conventional vessels, but it still remains within a reasonable range.

---

The current global container vessel market shows a differentiated trend of

. Feeder container vessels have become a market highlight due to explosive demand. According to Clarkson data, as of the release of this report in 2025, new orders for feeder vessels below 3000TEU have reached , representing a increase in growth rate compared to the same period in 2023-2024[3]. If the statistical scope is expanded to vessels below 5000TEU, the total number of orders rises to , doubling compared to the same period[3].

Shipbroker Braemar has a more optimistic forecast: among the currently operating container vessels below 3999TEU globally,

; by 2030, this proportion will rise to [3]. In the next 5-10 years, the global newbuilding demand for feeder container vessels will continue to rise, with strong certainty of market growth[3].

China Merchants Steamship’s container fleet has rich operation and management experience, and has unique competitive advantages in the Asian regional market. In the first three quarters of 2025, the company’s container shipping segment delivered outstanding performance:

Indicator	First Three Quarters of 2025	Same Period in 2024	Year-on-Year Change
Operating Revenue	RMB 4.426 billion	RMB 4.053 billion	+9.2%
Net Profit	RMB 1.037 billion	RMB 472 million	+119.7%

This segment has become one of the core growth drivers of the company’s performance, demonstrating strong profitability and market competitiveness[4].

. The feeder container vessel market benefits from the trend of combining trunk line transport by large vessels and more flexible feeder transport, allowing shipowners to adjust capacity flexibly in response to regulatory and market changes[3]. The 3000TEU vessel type is in the core range of feeder transport, suitable for serving intra-Asian routes and transshipment hubs.

. China Merchants Steamship’s container fleet service network covers major ports along China’s coast and in the Asia-Pacific region. The addition of 4 x 3000TEU vessels will effectively supplement capacity and enhance service capabilities on main routes such as Japan-Korea, cross-strait, Southeast Asia and India[4].

. The configuration of scrubbers reflects the company’s forward-looking response to the environmental regulations of the International Maritime Organization (IMO), ensuring that the vessels have compliant competitiveness and higher potential for rental income throughout their lifecycle.

---

The counterparty of this transaction is a subsidiary of China Merchants Industry, which is an internal connected transaction within the group. From a positive perspective:

. China Merchants Industry is a core shipbuilding platform under China Merchants Group, and the two parties have a long history of cooperation. Up to now, Dalian Shipbuilding has received orders for nearly of various types from China Merchants Steamship, and in 2024, China Merchants Steamship also ordered 8 x 306,000 DWT VLCCs and 5 x 115,000 DWT Aframax crude oil tankers from Dalian Shipbuilding[5]. The long-term cooperative relationship ensures construction quality and delivery progress.

. Referring to the market transaction price in the same period, the total cost of 4 x 3000TEU container vessels is about RMB 1.32 billion, which is basically consistent with the total project investment of RMB 1.324 billion, and the pricing of the connected transaction follows market-oriented principles[2].

. The company clearly disclosed that the connected transactions with the same connected party in the past 12 months do not exceed RMB 1.8 billion, the amount is within the company’s affordable range, and the transaction needs to be submitted to the shareholders’ meeting for review, with compliant and transparent procedures.

. Delivery in 2027-2028 means a capital occupation cycle of about 2-3 years, during which factors such as fluctuations in shipbuilding costs and interest rate changes that affect project returns need to be monitored.

. This transaction needs to be submitted to the shareholders’ meeting for review, and connected shareholders need to abstain from voting. The attitude and voting results of minority shareholders need to be watched.

. The container shipping market has strong cyclicality. If market freight rates drop sharply in 2027-2028, the investment return of the new vessels may fall short of expectations.

---

Indicator	Value	Industry Comparison
Market Capitalization	USD 9.084 billion	Large-scale shipping enterprise
P/E (TTM)	18.03x	Lower than the industry average of about 20x
P/B	2.23x	Within a reasonable range
ROE	12.45%	Better than the industry average
Net Profit Margin	19.52%	At a good level
Asset-Liability Ratio	Approximately 47%	Sound financial structure

The company expects to achieve a net profit attributable to shareholders of the listed company of

in 2025, representing a year-on-year increase of [6]. The net profit in the fourth quarter of 2025 is expected to increase by year-on-year, with a growth rate of [6]. The performance growth mainly benefits from:

1. The tanker fleet seized the opportunity of market recovery, and the operating profit in the fourth quarter is expected to increase by
   200%-230%
   year-on-year
2. Good gains from the disposal of old vessels
3. Fair value change gains from the acquisition of Antong Co., Ltd. shares

The stock price of China Merchants Steamship has performed strongly, with a

increase in 52 weeks, in the past 6 months, and in the past month[7]. The current stock price is in a historical high range, but considering the company’s continuous positive performance and diversified business layout, the valuation is still attractive.

---

China Merchants Steamship has formed a full-vessel-type fleet layout covering

, with the performance of each segment in the first three quarters of 2025 as follows:

Business Segment	Operating Revenue	Net Profit	Year-on-Year Change
Tanker Transport	RMB 6.734 billion	RMB 1.89 billion	-8.25%
Dry Bulk Transport	RMB 6.084 billion	RMB 714 million	-38.97%
Container Transport	RMB 4.426 billion	RMB 1.037 billion	+119.7%
Roll-on/Roll-off Transport	RMB 1.18 billion	RMB 146 million	-41.37%
LNG Transport	-	RMB 559 million	+17.9%

, with net profit surging 119.7% year-on-year, becoming the core engine of the company’s performance growth[4].

: The VLCC market showed a trend of “first suppressed, then recovered”. In September, the Time Charter Equivalent (TCE) of some voyages exceeded USD 90,000 per day, and the average daily TCE of the company’s VLCC fleet was about 10% higher than the market average. The performance in the fourth quarter is expected to rebound significantly[4].

: The average Baltic Dry Index (BDI) in the third quarter reached 1978 points, and the company’s TCE level outperformed the market by about 4%, supported by demand for grain transportation in South America and coal stock replenishment[4].

: 4 vessels of the Qatar Gas Phase I project have been put into operation, 7 new LNG vessels are expected to be delivered throughout the year, and there are 37 vessels under construction, which is about to enter the “investment harvest season”[4].

---

1. High certainty of performance growth
   : The net profit in 2025 is expected to be RMB 6-6.6 billion, with a year-on-year growth of 17%-29%, maintaining steady growth for consecutive years[6].
2. Cyclical resistance through diversified layout
   : The full-vessel-type layout covering tankers, dry bulk carriers, gas carriers, roll-on/roll-off vessels, and container vessels effectively diversifies single-market risks, and the synergy effects of various segments continue to play out.
3. High growth of container business
   : The net profit of the container transport segment surged 119.7% year-on-year, and the order of 4 x 3000TEU vessels will further strengthen the growth momentum.
4. Attractive valuation
   : The current P/E is about 18x, lower than the industry average, with a dividend yield of about 5% (calculated with reference to historical dividend payout ratio), having valuation advantages.
5. Strong financial strength
   : The net cash flow from operating activities in the first three quarters was RMB 5.803 billion, with a sound financial structure, having the ability to support large-scale capital expenditures.

1. Uncertainty in connected transaction approval
   : Need to pay attention to the review result of the shareholders’ meeting
2. Delivery cycle risk of new vessels
   : Market fluctuations during the delivery period of 2027-2028
3. Geopolitical risks
   : Impact of trade frictions and changes in tariff policies on the container shipping market
4. Fluctuations in fuel costs
   : Although scrubber configuration can partially hedge against it, fuel price fluctuations still affect earnings

: (based on the company’s continuous performance growth, diversified layout advantages and high growth of container business)

: With reference to industry valuation levels and the company’s growth prospects, the (based on the current stock price of RMB 11.25, there is an upside potential of about 7%-25%)

: The company is a high-quality target in the A-share shipping sector. The tanker business provides a performance safety cushion, the container business contributes growth flexibility, the LNG business is about to enter the harvest season, and its long-term investment value is prominent.

---

The strategic layout of China Merchants Steamship ordering 4 x 3000TEU container vessels has clear market background support and business synergy value. Against the background of explosive growth in demand for feeder container vessels, this investment will help strengthen the company’s competitive advantages in the Asia-Pacific regional market. The connected transaction has fair pricing and standardized procedures, and the transaction risks are generally controllable.

From the perspective of investment value, the company has high certainty of performance growth, effective risk diversification through diversified layout, and attractive current valuation. It is recommended that investors pay attention to the review result of the shareholders’ meeting for this connected transaction, and make investment decisions by combining the recovery progress of the tanker market in the fourth quarter and the continuous growth of the container business.

---

[1] Sina Finance - China Merchants Steamship: Plans to Order 4 x 3000TEU Container Vessels via Wholly-Owned Subsidiary (https://finance.sina.com.cn/7x24/2026-01-20/doc-inhhxznx7472024.shtml)

[2] Xinde Marine News - Analysis of Continuous Container Vessel Orders by German Shipowners (https://www.xindemarinenews.com/china/61895.html)

[3] International Ship & Offshore Network - Analysis of Explosive Demand for Feeder Container Vessels (https://www.ishipoffshore.com/archives/3126.html)

[4] China Merchants Steamship 2025 Third Quarterly Report (https://www.imarine.cn/wp-content/uploads/2025/10/20251030104140769.pdf)

[5] ODELY Shipping Market Weekly Report - China Merchants Steamship Shuttle Tanker Orders (https://www.odely.com/news_detail/13.html)

[6] Securities Times - China Merchants Steamship: 2025 Net Profit Expected to Increase 17%-29% Year-on-Year (https://www.stcn.com/article/detail/3579663.html)

[7] Gilin API - China Merchants Steamship Stock Data (601872.SS)