COSCO Shipping Holdings (01919) plans to build 12 18,000 TEU LNG dual-fuel powered container ships.

COSCO Shipping Holdings (01919) announced that on January 13, 2026, the buyer (our wholly-owned subsidiary China COSCO Shipping Asset Management) and the sellers (Jiangnan Shipyard and China CSSC Industry) entered into shipbuilding contracts for the construction of 12 18,000 TEU LNG dual-fuel container ships. The price for each ship is RMB 1.399 billion (equivalent to approximately HKD 1.556 billion), with a total price for all ships of RMB 16.788 billion (equivalent to approximately HKD 18.671 billion). This shipbuilding transaction will help stabilize and enhance the fleet's capacity, achieve long-term balanced development, further consolidate the industry's position, and align with the group's global development strategy for container shipping business. After the delivery of these ordered ships, they are planned to be deployed in the east-west main routes operation, enhancing the quality of services on related routes, optimizing the cost structure, and further strengthening the company's core competitiveness in the traditional mainline market. Taking into account environmental protection, cost, technology, global infrastructure, and policies, these ordered ships will be equipped with green fuel technology (LNG dual-fuel engines), reflecting the group's commitment to global energy-saving and emission reduction strategies. By exploring diverse new energy pathways and deepening the application of green fuel and related technologies, the company will maintain the balance and flexibility of its green fleet development. Furthermore, replacing older ships with these ordered ships will optimize the group's fleet structure, leading to lower per-container costs and increased economies of scale. The group has obtained basic quotations from several shipyards (including Jiangnan Shipyard and two other shipyards) for the construction of these ships. Based on the evaluation of price, technical capabilities, and delivery schedules, the overall offer conditions provided by Jiangnan Shipyard are deemed the most optimal, as they can complete deliveries earlier than other shipyards, aligning with the group's strategic planning. Jiangnan Shipyard's technical capabilities and support adequately meet the group's technical requirements for the ships, and although their price is at the median level compared to other shipyards' prices obtained during the quotation process, it is still competitive. The group is aware of potential risks in this shipbuilding transaction, including financing and fluctuations in the shipping market. Considering the group's strong operating cash flow and low debt levels in recent years, as well as strategic deployment of ships (including these ordered ships) to respond to evolving market conditions and the flexibility to adjust capacity by extending or terminating some ship leases based on market conditions, the group believes that the related risks in this shipbuilding transaction are reasonable and manageable. After the delivery of these ships, the group's fixed assets will increase while current assets will decrease, and long-term liabilities will increase, depending on the proportion of internal resources and external financing used for the contract. For illustrative purposes, if the group uses internal cash resources and external financing to pay 40% and 60% of the total price respectively, the group's current assets (cash and bank balances) will decrease by RMB 6.715 billion (40% of RMB 16.788 billion), while the group's non-current assets (properties, plants, and equipment) will increase by RMB 16.788 billion, and the group's total liabilities will increase by RMB 10.073 billion (60% of RMB 16.788 billion). The group's profitability will not be significantly impacted solely by this shipbuilding transaction. It is expected that these ships will generate income through the group's core business, enhance operational efficiency and capabilities, and contribute to the group's long-term profitability.