On the evening of August 30, China Merchants Port Group Co., Ltd. (hereinafter referred to as “CMPort”, 001872.SZ) its “2023 Interim Report”, disclosing the company's performance for the first half of the year. In the face of a sluggish global economic recovery and increased uncertainty in trade and economic affairs, the company maintained a steady yet progressive overall operational approach. Concentrating on “endogenous growth” and “innovation and upgrade”, CMPort seized opportunities amidst complex circumstances, fully implementing various development initiatives. In the first half of the year, the company's port business aligned with the industry's overall trends, increasing its market share in the regions it operates. The investment in Ningbo Zhoushan Port Company Ltd. contributed to an increment in business volume, with CMPort accomplishing a total container throughput of 87.075 million TEUs, a year-on-year increase of 30.4%, and a bulk cargo throughput of 630 million tons, up by 115.3% compared to the same period last year. The company achieved a revenue of RMB7.795 billion, with the net profit attributable to equity holders standing at RMB1.902 billion, essentially maintaining the levels seen in the same period last year, thus showcasing the resilience of the company's operational development.

Reinforcing Homebase Port Development by Strengthening Regional Position and Extending the Value Chain

Despite an overall decrease in container throughput in the Guangdong-Hong Kong-Macao Greater Bay Area, the West Shenzhen homebase port has managed to consolidate and further enhance its market share in foreign trade. Meanwhile, marking a significant breakthrough, vessels with a capacity of 200,000 tons have commenced night operations in the Tonggu Channel. In Sri Lanka, the homebase ports persist in bolstering their position as the hub for international shipping in the South Asian region. The Colombo International Container Terminal (CICT) continues to maintain its dominant position in the Colombo market, steadily advancing the South Asian Commercial and Logistics Hub project. Furthermore, Hambantota International Port Group (HIPG) has witnessed remarkable growth in the roll-on/roll-off, liquefied petroleum gas, fuel oil, and other transshipment businesses.

Advancing Technological Innovation by Promoting Digital Innovation and Building Smart Ports

The company is steadily implementing the Ministry of Transport's key task of upgrading the Container Terminal Operating System (CTOS) architecture, continually optimizing mixed autonomous driving solutions. It is accelerating the research and development and widespread promotion of the “CMePort 3.0” comprehensive service platform, consistently advancing the integration of The Smart Management System (SMP) at deeper levels. The “Mawan Smart Port 5G Project” has been selected as one of the first batch of pioneering applications and excellent case studies in Shenzhen. Moreover, the “Electronic Bill Switching Platform Project for West Shenzhen Terminals Based on Consortium Blockchain and Cloud Technology” has been honored with a first-class award for technological progress.

Expanding Market Reach through Enhanced Service Quality and Innovative Approaches

TCP Participações S.A. (TCP), the company's stronghold in Latin America, has further increased its market share. Meanwhile, HIPG has fortified its leadership position in the regional roll-on/roll-off business sector. CMPort is actively fostering business synergy among enterprises within China Merchants Group, crafting premium shipping routes with “customized terminal services” and actively expanding its business in Southeast Asian routes. Its coordinated ports business in the Greater Bay Area now encompasses all major regions in Guangdong province, serving nearly 6,000 import and export enterprises across 30 locations, and has handled over 400,000 TEUs since operation began.

Enhancing Operational Management through Control System Construction and Operational Capability Optimization

Leveraging the SMP as a mainstay, CMPort is crafting a one-stop comprehensive management platform to support business analysis across all sectors including container, bulk cargo, logistics parks, integrated development, and smart technology. The platform harnesses digital technology as a pivotal force, instigating a transformation in CMPort's operational management methods, models, and philosophies through the application of intelligent tools. Currently, it has essentially achieved the aggregation and management of asset lifecycle information, as well as the standardization and online transition of primary business processes. Furthermore, the company continues to refine its engineering management system, establishing an engineering management center; improvements in profit optimization capabilities are noticeable, with ongoing efforts to develop measures to enhance quality and efficiency. It is also revamping the business & financial analysis framework and imposing strict controls on the growth of costs and expenses, deepening cost control to establish a regular mechanism for cost reduction and efficiency improvement. The company has attained phased achievements in the realm of “optimized operation”.

Deepening Reforms through strengthened Institutional reforms and Enterprise Vitality Invigoration

The company is fully implementing the “Double-Hundred Action”, aiming to serve the national development strategy, optimize capital allocation, and enhance industry competitiveness with a focus on the port as an integrated industrial system. Using governance mechanisms, employment mechanisms, and incentive mechanisms as key leverages, it has made new progress in promoting diversified equity reforms, optimizing the governance system of overseas legal entities, implementing market-oriented personnel selection and employment mechanisms, and reinforcing the directive function of salary incentives. In May 2023, the State-owned Assets Supervision and Administration Commission of the State Council released the 2022 special assessment results for “Double-Hundred Enterprises”, where the company was rated “excellent” due to its outstanding performance and notable reform achievements.

Advancing Comprehensive Development Business Model Innovation and Targeted Industrial Promotion

The number of contracted enterprises in the HIPG Industrial Zone has reached 48, while the Djibouti International Free Trade Zone (DIFTZ) has seen its contracted enterprises rise to 332. Land sales within DIFTZ have achieved a new record high, and overall business performance remains stable, showing improvement compared to the same period last year. Relying on its domestic and international port and park resources, the company has initiated a green channel for domestic goods to enter and exit ports by participating in showcases at the “Made by Liaocheng” DIFTZ exhibition center platform; this effort aims to drive the extension of the value chain both upstream and downstream.

ESG Development: Recognized on the “Pioneer” List, Promoting Harmonious Development

CMPort actively embraces the ESG philosophy, continually strengthening ESG governance and proactively disclosing ESG reports, with the aim of becoming a world-class green and intelligent comprehensive port service provider. In the first half of the year, the company, owing to its long-term responsible operations and fulfillment of its responsibilities, earned multiple accolades from the industry and capital markets. It successfully made its mark on the “China ESG Top 100 Listed Companies” list, ranking 68th overall and 3rd in the transportation and logistics industry. At the West Shenzhen Homebase Port, two of the company's subsidiaries, Chiwan Container Terminal Co. Ltd. and Shenzhen Mawan Port and Warehousing Co., Ltd., both received the four-star “Chinese Green Port” honor awarded by the China Ports & Harbors Association.

In the latter half of the year, CMPort will steadfastly adhere to a guideline of steady yet progressive advancements, adapting to the changing landscape and embodying new developmental philosophies. Fueled by “endogenous growth” and “innovation and upgrade”, the company is set to realize effective qualitative enhancements and rational quantitative growth in its operations, all in a bid to make stable progress on becoming a “world’s leading comprehensive port service provider with high quality.”