After the integration of the two largest shipping giants in China, COSCO SHIPPING Ports (01199.HK), a segment of COSCO SHIPPING Holdings Co., Ltd. The layout of the business is speeding up.

In recent years, COSCO SHIPPING Ports has obtained the rights and interests of ports along important shipping routes in Europe through the acquisition of operating rights and equity. Taking advantage of the opportunity of the Danish shipping giant Maersk Group to reorganize its internal asset structure, COSCO SHIPPING Port once again entered Zeebrugge Port as it wished in mid-September.

Holding Belgian Ports

COSCO SHIPPING Ports announced on September 11 that its wholly-owned subsidiary, China Shipping Terminals, had signed a legally binding memorandum of understanding with APM Terminals BV, a subsidiary of the Maersk Group, to acquire the company at a price of 35 million euros. 76% of the issued share capital of Maersk Zeebrugge Terminal Company (hereinafter referred to as APMTZ), the operator of Zeebrugge Port in Belgium.

The Port of Zeebrugge is one of the four deep-water ports on the North Sea coast of the European continent. It is the largest gas transshipment port and liquefied gas import port in Europe, and it is also the sixth largest container port in Europe. Zeebrugge Terminal Company is one of the container terminals in the port of Zeebrugge. The front water depth of the terminal is -15.2 meters, the length of the shoreline is 900 meters, the yard area is 450,000 square meters, and it is equipped with 7 super-Panamax bridge cranes. The capacity is 850,000 TEU/year.

For Chinese companies, the Port of Zeebrugge is not a "new friend". As early as 2010, the Shanghai International Port Group (hereinafter referred to as SIPG) had acquired a 25% stake in APMTZ and became the second largest shareholder of the port. COSCO SHIPPING Ports currently holds a 24% stake in the port, which was acquired by China Shipping Terminal from APMTZ in 2013.

According to the new merger and acquisition plan, Maersk Terminal will first acquire its shares from SIPG, and then sell the shares held by SIPG together with the shares currently held by Maersk Terminal to China Shipping Port or its affiliated companies. After the acquisition is completed, APMTZ will become an indirect wholly-owned subsidiary of COSCO SHIPPING Ports, and its financial statements will be incorporated into the consolidated financial statements of COSCO SHIPPING Ports.

It is worth noting that SIPG spent 21.76 million euros to obtain a quarter of APMTZ's equity seven years ago, but this time China Shipping Terminal may only need to spend 35 million euros to obtain more than three-quarters of APMTZ's equity, at least From the price point of view is quite suitable.

This may benefit from the internal adjustment of Maersk Group on the one hand, and on the other hand, it is related to the long-term and in-depth cooperation between Chinese-funded enterprises and Maersk Terminal Company.

Maersk Terminals has cooperated with Shanghai Port Group for many years. The two parties established a joint venture company Shanghai Hudong Container Terminal Co., Ltd. as early as 2002.

According to Maersk’s financial report for the second quarter of 2017 released last month, although its shipping and logistics business segment has rebounded significantly due to the recovery in cargo volume, its terminal business is not optimistic. Maersk Terminals lost $100 million in the second quarter of this year, compared with a profit of $112 million in the same period last year. Maersk Group believes that this result is mainly due to the challenges in the commercial operation of the terminal and the impairment of some terminal assets.

In order to offset this part of the impact, Maersk Terminal has sold some assets. For such a company that is extremely sensitive to the profitability of its business segments and is particularly prepared for rainy days, it is also in line with its usual practice to further sell assets that have dragged down performance under such circumstances. style of.

In late August, Maersk Group decisively sold its subsidiary Maersk Oil to energy giant Total for US$7.45 billion. It is not surprising that the port management rights were dropped at a low price.

From the perspective of COSCO SHIPPING Ports, holding APMTZ can create a high-quality and balanced global terminal network, and at the same time strengthen its terminal control and management capabilities. It will also optimize the layout of the Northwest European route network and open up new market growth points. This will bring more benefits to the operation of the parent company COSCO SHIPPING fleet and the synergy of alliance business.

Overseas port layout

The Port of Zeebrugge is just a step in COSCO SHIPPING's global terminal business layout. Before the integration of China's two largest shipping giants COSCO and China Shipping, the two parties had already consciously started to acquire port equity, operating rights and terminal operating companies. Equity, this is also the business model of the world's top shipping giants.

COSCO SHIPPING Ports has formulated three strategies for itself: promoting the layout of global terminals, exerting synergies and strengthening control.

After the integration was completed and the business was reorganized, the port business has also become a key link in COSCO SHIPPING Holdings' shipping logistics business, and the speed of mergers and acquisitions has also increased significantly.

In May this year, COSCO SHIPPING Ports completed the acquisition of about 17% of the equity of Qingdao Port (06198.HK), an important port in northern China. Currently, it holds nearly 19% of the equity of Qingdao Port together with its subsidiary China Shipping Terminal. At the same time, it also completed the merger and acquisition of a series of port resources such as Piraeus Port in Greece, Khalifa Port in Abu Dhabi, Rotterdam Port and Vado Container Terminal in Italy.

In June this year, COSCO SHIPPING Ports acquired a 15% stake in SIPG for 18.9 billion yuan, and at the same time spent 200 million euros to acquire a 51% stake in Noatum Port Holdings (NPH), the largest Spanish terminal operator. NPH's main assets include two container terminals, Notage Container Terminal Valencia (NCTV) and Nota Container Terminal Bilbao (NCTB), as well as two auxiliary rail yard companies, Conterail Madrid and NRTZ Zaragoza.

The Port of Valencia is one of the three largest container ports in the Mediterranean, and NCTV is the largest container terminal in the Port of Valencia. The port's immediate hinterland within a radius of 350 kilometers accounts for nearly 50% of Spain's GDP, and is not only the main gateway to the Iberian Peninsula , but also a transshipment hub for the Western Mediterranean.

After a series of acquisitions, COSCO SHIPPING's fleet can be supported by the same group's business in the Mediterranean Sea, the Atlantic Ocean and the five major domestic port groups, which has obvious advantages in optimizing routes, improving efficiency and business volume.

According to the semi-annual report data released by COSCO SHIPPING Holdings, the throughput of container terminals under COSCO SHIPPING Ports has increased significantly compared with the same period last year. Among them, the Bohai Rim region increased by 2.66% year-on-year, the Yangtze River Delta region increased by 4.87% year-on-year, and the Pearl River Delta region increased by 8.15% year-on-year. %, the increase overseas is even more obvious. The cargo volume increased from 635.16TEU in the first half of last year to 888.09TEU in the first half of this year, a year-on-year increase of 39.82%.

In the first half of the year, the container terminals under COSCO SHIPPING Ports achieved a throughput of 41.7809 million TEUs, a year-on-year increase of 11.84%. Among them, the total throughput of holding container terminals was 8.0465 million TEU, a year-on-year increase of 2.11%; the total throughput of non-holding container terminals was 33.7344 million TEU, a year-on-year increase of 14.44%.

Growth in throughput leads to revenue growth. In the first half of the year, COSCO SHIPPING Ports achieved an operating income of 1.92 billion yuan; an operating profit of 3.12 billion yuan; a net profit of 2.695 billion yuan; and a net profit attributable to owners of the parent company of 2.569 billion yuan.