2010 Annual Results.pdf by sushaifj

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									2010 Annual Results




24. 3.
24 3 2011
Agenda


              Annual R
         2010 A          lt Highlights
                   l Results Hi hli ht

         Market and Business Review

         Financial Review

         Outlook and Development Strategy

         Appendix: Corporate Profile




                                            2
2010 Annual Results
Highlights




                      3
2010 Annual Results Highlights
    Revenue: HK$8,667 mn (+432% YOY)*
                                    HK$1,359
    Profit before income tax (PBT): HK$1 359 mn (+50% YOY)
        Segment PBT in Shipping Services: HK$410 mn (+26% YOY)
    Profit attributable to the equity holders of the Company:
                                q y                     p y
    HK$1,269 mn (+50% YOY)
        If excluding all profit in relation to Sino-Ocean Land, profit attributable
        to the equity holders would have been HK$287 mn (+18% YOY)
    Basic earnings per share: HK$ 0.84(+49% YOY)
    Completion of Disposal of Non-Core Business (16.85% interests in
    Sino-Ocean Land) with net disposal proceeds of HK$5.26 bn
    Proposed final DPS: 3.0 HK cents
    Proposed special DPS 35 0 HK cents
    P      d     i l DPS: 35.0      t
        Together with interim DPS 2.0 HK cent, total DPS for the year:40.0
        HK cents (2009: 9.4 HK cents )
                       * Mainly because of the substantial revenue contribution (HK$5.9 bn) from the
                       new business segment “Trading and Supply of Marine Fuel” and significant
                       rebound in the revenue (HK$1.3 bn, +223%) of container coatings business        4
Business Development
        Expansion of Service Network in Japan and Singapore to Build a
         Global Platform of Marine Equipment and Spare Parts Supply
1. In Feb 2010, COSCO International set up Shin Chung Lin Corp. in Japan for the purpose of carrying on the
   business of sales and installation of marine equipment and spare parts for vessels.
2. In Aug 2010, COSCO International acquired 100% of Xing Yuan (Singapore) Pte Ltd to expand its supply of
   marine equipment and spare parts business in Singapore.
3. In Oct 2010, COSCO International expanded the scope of business of Yuantong Marine Trade (Shanghai).




                                                                   1   Yuantong Marine Services (HK)

                                     5
                                                 3
                                             4

                                         1
                                                        2              3               4                      5

                                                      Xing Yuan    Shin Chung Lin     Yuantong         COSCO (Beijing) Marine
                                 2                   (Singapore)      (Japan)         (Shanghai)       Electronic Equipment Ltd




                                                                                                                                  5
Business Development

  Progress in the Development of Marine Bunker Supply Business

April 2009: Acquisition of                     November 2009:                                   Possible Acquisition of
18% interest in Double                         Incorporation of Sinfeng                         certain marine bunker
Rich Limited in Hong                           Marine Services Pte. Ltd in
Kong
                                                                                                supply business from
                                               Singapore
                                                                                                COSCO Group*
                       COSCO Group



       50%           COSCO (HK) Group                                                           COSCO International
                                                           100%                                 intends to develop into a
CHIMBUSCO**                                                                                     leading Asia-based global
                     COSCO International                Petroleum
                                                  COSCO Petroleum***
                                                                                                    i b k
                                                                                                marine bunker supplyl
                                                                                                company.
       82%
                   18%                       100%

     D bl Ri h (HK)
     Double Rich                  Sinfeng Marine Service (SGP)



   * An announcement was made on 16 Aug 2010, saying that “ the company is exploring or liaising in relation to the possible
      q             pp y                                  ( )                 p
   acquisition of supply of bunker oils and other business(es) from COSCO Group”.
   **China Marine Bunker (Petro China) Co., Ltd., a 50:50 JV of COSCO Group and Petro China, is the biggest marine bunker
   supply company in China.
                                      *** A fuel oil supply and trading company in Singapore, provides services to the fleet
                                      of COSCO Group                                                                           6
Market and
Business R i
B i      Review




                  7
Market Review (1) Global Shipping Capacity Growth
  DWT mn


  1,400.0 
   ,                                                                                                                                      1,348.9 
  1,300.0                                                                                                                    1,229.7 
  1,200.0                                                                                                       1,148.7 
                                                                                                   1,076.3 
  1,100.0 
                                                                                      988 9
                                                                                      988.9 
  1,000.0                                                                 926.1 
                                                  854.6      878.9 
   900.0                   822.0       835.5 
              800.4 
   800.0 

   700.0 

   600.0 
                                                                                                                                   535.3 
   500.0                                                                                                       417.3     458.3  451.0 
                                                                                                           404 2
                                                                                                           404.2      432.8 
   400.0                                                                336.7 
                                                                        336 7     360.1        382.8 391 7
                                                                                               382 8 391.7 
                                   306.9     311.7     320.2               322.5     345.0 
             304.4        311.7                 294.7     302.0 
   300.0       266.9        274.9     286.9 

   200.0                                                                                                                                      183.7 
                                                                                                       144.6        161.3        169.0 
                                                     84.8 
                                                     84 8       91.5
                                                                91.5         99.6 
                                                                             99.6         111.5 
   100 0
   100.0          64.7        70.3 
                              70 3        77.8 
                                          77 8

       ‐
              2000         2001         2002      2003      2004          2005        2006        2007            2008       2009          2010
                                      Tanker        Dry Bulk Carrier               Containership                Total



                                                      Source: Clarkson Research
                                                                                                                                                       8
Market Review (1.1) Newbuild Ship Contracts & Price
      DWT mn

                     Global Total Contracts                                                                    49%
                                                                                                   47%
                     P.R. China Shipbuilder's Share
                                                                     39%              37%
                                                      32%
                                                                      276.7
                                  22%
                   17%                                185.9                           186.1
                                                                                                             123.5
                104.4              94.6
                                                                                                   53.2


                   2004            2005                2006            2007            2008        2009      2010



    Global Ship Orderbook by                       Shipbuilding
                                                                 2002 2003 2004 2005 2006 2007 2008 2009 2010
        Builder Country*                         Price (US$ mn)*
                                                          VLCC             63.5    77.0 110.0 120.0 129.0 146.0 150.0 101.0 105.0
     Japan                 China                        Capesize           36.3    48.0     64.0 59.0 68.0 97.0 88.0 56.0 57.0
17%,80
17% 80 mn DWT              41%,
                           41% 191 mn DWT
                                                        Panamax            21.5    27.0     36.0 36.0 40.0 55.0 46.5 33.8 34.5
                                                       Handymax            19.0    24.0     30.0 30.5 36.5 48.0 42.0 30.5 31.0
  South Korea                                                       year.
                                                 * As at end of the year
  33%,152 mn DWT


                                                      Source: Clarkson Research (February 2011)
                                                                                                                                    9
Market Review (1.2) Newbuild Ship Deliveries
  DWT mn


             Global Total Deliveries                                                                             55%
                                                                                                     45%
             P.R. China Shipbuilder's Share                       41%         38%          37%
                                                     31%
                  17%         20%        23%               +28%
      14%                                                          149.2
                                                                   149 2       146.9
                                                                               146 9
                                                                                            132.5
                                                       116.8
                               81.2       92.0                                                        85.5
      70.3         76.5
                                                                                                              53.0



      2005        2006         2007       2008         2009        2010       2011E        2012E     2013E   2014E




                                                                                                 Breakdown of 2010 Deliveries

                                                            +71%     61.8             Japan                          Chi
                                                                                                                     China
                                                                                      21%, 31.7 mn DWT               41%, 61.8 mn DWT
             Deliveries by China                       36.1

                Shipbuilders
                                                           2009    2010                   South Korea
                                                                                          32%, 47.5mn DWT

                                              Source: Clarkson Research (February 2011)                                            10
Market Review (2) Newbuild Containers in China


  ‘000 TEUs



                                 3,900
                                 3 900

                      3,000
              2,500                                                 2,744
                                                     2,510

                                                                            2H: 1,806




                                                             267            1H: 938



               2005   2006        2007                2008   2009   2010




                              Source: Company data
                                                                                        11
Market Review(3) Marine Bunker Sales Volume in SGP* & HK**
   ‘000 tonnes
                                                                                                                   Singapore
                                                                                                  40,853
                                                                          34,936      36,387
                                                               31,546
                                                   28,379
                                       25,479
                              23,567
            20,097
              ,      20,809




             2002    2003     2004       2005       2006        2007       2008        2009       2010

   ‘000 tonnes                                                                                                     Hong Kong



                                                                                                  9,731
                                                                 ,
                                                                7,090      6 625
                                                                           6,625       6,949
                                        4,976       5 916
                                                    5,916
                              4,626
             2,974   3,216


             2002     2003     2004      2005        2006       2007        2008       2009        2010
                                  *Source: Maritime and Port Authority of Singapore (MPA)
                                  ** Source: Census and Statistics Dept. of the Government of the Hong Kong Special Administrative Region
                                                                                                                                       12
Business Review - Shipping Services

                        Stable Earnings Growth
                               $
       2010 Segment Revenue: HK$ 8,078 mn (+628% YOY)
       2010 Segment PBT : HK$ 410 mn (+26% YOY)
       2010 Segment Profit After Income Tax: HK$ 353 mn (+27% YOY)

                 Segment Profit before Income Tax

                                                                409.9
                                                                409 9
             (HK$ mn)
                                                        324.7

                                                256.7
                                        239.9

                                180.8
                        132.8
              124.1




               2004     2005    2006    2007    2008    2009    2010


                                                                        13
Business Review - Shipping Services (cont’d)
 1. Ship Trading Agency Services*

                       Revenue                                                        Operating Profit
HK$ mn                                                              HK$ mn                                         78%
                                            +5%                                Operating Profit Margin   74%

                                                  159 **                                       65%          +10%
                                     152                                            64%                            124
                                                         19% from                                        113
                           131                           secondhand &
                                                         others         49%

                                                                                                83


                 74
                                                         81% from
                                                         newbuild                    47
         53

                                                                         26




      2006      2007      2008       2009         2010                  2006        2007       2008      2009      2010


* COSCO International Ship Trading Co., Ltd, a wholly-owned subsidiary of the Company, provides exclusive agency services in
                                                     Group.
shipbuilding and ship trading for the fleet of COSCO Group
** In which HK$ 138.2 mn or 86.7% was from controlling subsidiaries of COSCO Group.

                                                                                                                          14
Business Review - Shipping Services (cont’d)

 2. Marine Insurance Brokerage Services


                    Revenue                                                      Operating Profit
HK$ mn                                                             HK$ mn               Operating Profit Margin

                                                                                                        70%        73%
                                        +16%         *                           66%         65%
                                                78

                         66        67                                     51%
                                                         58% from P&I                                      +20%
               53                                        and other                                                 57
                                                         insurance
     43                                                                                                  47
                                                                                              43
                                                                                  35
                                                         42% from Hull,
                                                         Disbursements     22
                                                         and War Risk
                                                         Insurance


   2006      2007       2008      2009         2010                       2006   2007       2008       2009       2010

  *In which HK$ 55.9 mn or 71.4% was from controlling subsidiaries of COSCO Group.
                                                    g                           p



                                                                                                                         15
Business Review – Shipping Services (cont’d)

 3. Supply of Marine Equipment and Spare Parts


                       Revenue                                                      Operating Profit
HK$ mn                                                             HK$ mn
                                                     *
                                            +35% 602                                         Operating Profit Margin


                            455         445


                 351                                                                    8%
                                                                            7%                                7%        7%
      312
                                                                                                                   +35% 44 **
                                                                                                  5%
                                                                                                             33
                                                                                       28
                                                                            22                    21



     2006       2007        2008        2009       2010                    2006       2007       2008       2009       2010
*In which HK$ 412.6 mn or 68.5% was from controlling subsidiaries of COSCO Group.
** Including 1) HK$5 mn reversal of provision for impairment of trade receivables, net of trade debts recovered (2009: HK$0.86mn
of provision of trade receivables, net of reversal); 2)HK$ 2.9mn fair value gains on investment properties (2009: HK$ 4mn).
                                                                                                                                   16
Business Review – Shipping Services (cont’d)

 4. Production and Sale of Coatings (1) Container & Industrial
  Anti-corrosion                            Companies
  Anti corrosion Coatings by COSCO Kansai Companies*

                    Revenue                                                     Operating Profit
HK$ mn                                                        HK$ mn
                                                                                           Operating Profit Margin
           1,580                                                         8%
                     1 381
                     1,381                                                        7%
                                          1,292
  1,228
                                                                                               5%                     5%
                               +223%                                98        103
                                                  2H:793                                             3%

                                                                                          67                     70
                                400                                                                 +421%
                                                                                                                      2H: 61
                                                  1H:499
                                                                                                     13
                                                                                                                       1H:9

  2006     2007       2008      2009      2010                    2006        2007       2008       2009       2010
  * 63.07%-64.71% owned subsidiaries, and the total annual capacity of the three plants located in Tianjin, Shanghai and
    Zhuhai is 100,000 tons.

                                                                                                                              17
Business Review – Shipping Services (cont’d)

   4. Production and Sale of Coatings (1) Container & Industrial
    Anti-corrosion                                        (cont’d)
    Anti corrosion Coatings by COSCO Kansai Companies (cont d)

     Sales Volume of Container Coatings                              Sales Volume of Industrial Coatings

   Tonnes
70,000                                                              Tonnes
                   63,985
60,000 
          55,565
            ,                                 55,594              20,000 
                            51,034
50,000 

                                                                  15,000                                    +3%
40,000                               +1350%          2H: 31,301                                               10,379
                                                                                            10 091 10 113
                                                                                            10,091 10,113
30,000                                                            10,000            9,164
                                                                            6,991
20,000 
                                                                   5,000 

10,000                                               1H: 24,293
                                      3,835
                                                                       0 
     0 
                                                                            2006    2007     2008   2009      2010
          2006     2007     2008      2009    2010



                                                                                                                       18
Business Review – Shipping Services (cont’d)
4. Production and Sale of Coatings (2) Marine Coatings by Jotun COSCO*

                     Sales Volume                                                        Share of Profit
  Tonnes                             +16%
                                              108,069 **            HK$ mn
                                                                                                          101
                                                      For ship
                                     92,800           maintenance                                                -25%
                                                      & repair
                                                      23%
                                                                                                                      77 ***
                           72,014




                 42,688                                                                         44

                                                      For ship
       28 920
       28,920                                             b ildi
                                                      newbuilding ****
                                                      77%                           23

                                                                          11



        2006      2007     2008      2009      2010                      2006      2007       2008        2009       2010

* A 50% owned JCE, and the annual capacity of Jotun COSCO Guangzhou plant is 14 million litres or about 20,000 tons.
** In which the volume for ship newbuilding increased by 24% YoY and for ship repair and maintenance increased by 14%YoY.
*** The YoY increase of the price of the two major raw materials (
                             p                  j                             p                products) squeezed the p
                                                                 (oil-refined products & metal p       ) q            profit
    margin of newbuilding marine coatings.
**** Representing the supply of marine coatings for 15.4 mn DWTs new build ship capacity.
Note: As of Dec 31, 2010, the total secured contract volume of the supply of newbuilding marine coatings amounted
      to 39.8 mn DWTs.                                                                                                         19
Business Review – Shipping Services (cont’d)
4. Production and Sale of Coatings (cont’d)

                        Leading Market Share in China
      1st
             New-building               Maintenance & Repair                 Container
            Marine Coatings               Marine Coatings                    Coatings


                          28%                                    25%                     31%




                     Jotun COSCO                         COSCO Kansai Companies



                                Source: Company Statistic Data
                                                                                               20
Business Review – Shipping Services (cont’d)

 5. Trading and Supply of Marine Fuel and Related Products


       Sinfeng Marine Service (100%)
                              (100%)                                Historical Annual Sales Volume*

          Sales Volume: 1.62 mn tons
          Revenue: HK$ 5.9 bn                                         180 
                                                                   ‘000 tons                                      1,620
                                                                      160 
          Operating Profit: HK$ 30.9 mn
          O            f      $                                       140 
                                                                      120 
                                                                      100 
                           (18%)
               Double Rich (18%)                                                                       770
                                                                       80 
                                                                                            720
          Profit Contribution: HK$ 1.1 mn                              60 
                                                                                 520

 Note: The 18% equity interests of Double Rich was acquired in         40 
  p         ,         p
 Apr 2009, and its profit contribution for the seven months            20 
                                                                       20
 ended 31 Dec 2009 was HK$10.5 mn. The profit contribution
 decline in 2010 was mainly due to the short-term unusually             0 
 keen competition in Hong Kong marine fuel supply market                         2007       2008       2009        2010
 which emerged during the second half of 2010 following the
 entry of new suppliers leading to the loss of its major jointly
     t ll d   tit However, th marine f l supply market i
 controlled entity. H        the     i   fuel      l     k t in
 Hong Kong has gradually recovered since Dec 2010.                           * The businesses before Dec 2009 was from a subsidiary
                                                                             of COSCO Group which ceased operation in Nov 2009,
                                                                             and Sinfeng was established in Nov 2009.
                                                                                                                                      21
Business Review – General Trading
     2010 Segment Revenue: HK$ 786.8 mn (+53%)
     2010 Segment PBT: HK$ 24.1 mn (+3193%), including 1) a one-off gain on
     disposal of asset held for sale: HK$ 5.1 mn; 2)exchange gain: HK$ 7 mn.



  Trading f Asphalt
  T di of A h lt



                                                                       “Trading of Asphalt” contributes
                                                                       the major profit in “General
                                                                       Trading”
                                               4
                                                             Jiangsu   2010 Asphalt Sales Volume:
                                          Shaanxi
                                                             Anhui     101,303 tons (+8%)
                                 3   Sichuan                           China’s demand for asphalt will
                                                       6   Jiangxi     remain strong because of
                                        Guizhou Hunan                  continued investment in road
                               Yunnan                                  infrastructure.
                                                   5
                                           Guangxi
                                                                       Existing Asphalt Sales Region
                                                                       Newly developed Asphalt Sales Region

                                                                                                          22
Financial Review




                   23
Financial Summary
 (HK$ mn)                                                                   2010              2009         Changes
 Revenue                                                                8,666.9            1,630.1           +432%
 Gross Profit                                                              715.2              423.0            +69%
 Gross Profit Margin                                                       8.3%              25.9%          -17.6pts
 EBITDA                                                                    818.9              634.8            +29%
 Operating Profit                                                          294.0              186.8            +57%
   Share of results of JCEs                                                 79.7              104.0            -23%
   Share of results of associates                                          439.0              366.2            +20%
   Net deemed disposal gains/(loss) in an associate                         (0.8)             245.3                  -
   Gain on disposal of an associate                                        545.7                    -                -
 Profit Before Income Tax                                               1,358.8
                                                                        1 358 8               905 0
                                                                                              905.0            +50%
 Profit attributable to the equity holders of the Company               1,268.6               843.7            +50%
 Basic earnings per share (HK cents)                                       83.97              56.25            +49%
 Final DPS (HK cents)                                                        3.0*                8.4                 -
 Special DPS (HK cents)                                                   35.0**                    -                -
 Total Annual DPS (HK cents)                                                40.0                 9.4                 -
                                 * Together with the interim DPS of 2 HK cents, representing 26% of 2010 net profit
                                 excluding profit in relation to Sino-Ocean Land;
                                 ** Representing 54% 2010 net profit in relation to Sino-Ocean Land, or 10% of net disposal
                                 proceeds of 16.85% interest in Sino-Ocean Land.                                              24
Segment Revenue
                                                                     Revenue Breakdown
(HK$ mn)                                 2010      2009    Changes   in Shipping Services
                                                                           2010
Shipping Services                      8,078.4   1,110.1    +628%
                                                                            2% 1%
   Ship Trading Agency Services          159.5     152.1      +5%                   7%
   Marine Insurance B k
   M i I            Brokerage                                                            16%
                                          78.3      67.4     +16%
   Services
   Supply of Marine Equipment and
                                         601.9     445.1     +35%
   Spare Parts                                                       74%
   Production and Sale of Coatings     1,291.8     400.0    +223%

   Trading and Supply of Marine Fuel   5,946.9      45.6   +12941%          2009
                                                                            4%    14%
General Trading                          786.8     515.4     +53%
                                                                                         6%
Property Investment                        0.1       5.0      -98%   36%

Total                                  8,865.3   1,630.5    +444%
                                                                                        40%




                                                                                               25
Segment Profit Before Income Tax
                                                                                              PBT Breakdown
(HK$ mn)                                         2010        2009      Changes              in Shipping Services

Shipping Services                                409.9       324.7          +26%                    2010
                                                                                                  7%          31%
   Ship Trading Agency Services                  126.6       116.2           +9%
   Marine Insurance Brokerage
                                                  57.4        47.6         +20%          36%
   Services
   Supply of Marine Equipment and
                                                  48.0        37.1         +29%
   Spare Parts                                                                                                  14%
                                                                                                        12%
   Production and Sale of Coatings               146.4       113.1          +29%

   Trading and Supply of Marine Fuel              31.5         10.7       +194%                     2009
General Trading                                   24.1          0.7      +3193%                      3%
                                                                                                                36%
Property Investment                            981.4*        636.1          +54%            35%

Others                                          (56.6)
                                                (56 6)       (56.5)
                                                             (56 5)               -

Total                                         1,358.8        905.0          +50%
                                                                                                  11%         15%


                                  * Including 1)share of profit from Sino-Ocean Land: HK$436.5 mn; 2) net deemed
                                  disposal loss: HK$ 0.8 mn, mainly due to the issue of new shares by Sino-Ocean Land;
                                  3) gain on disposal of Sino-Ocean Land : HK$545.7 mn.                                  26
Financial Position & Financial Ratios Highlights

   (HK$ mn)                          As at 31 Dec 2010   As at 31 Dec 2009       g
                                                                             Changes

   Consolidated Total Assets                   9,365.4             7,509.9     +25%
   Consolidated Total Liabilities              1,835.2              894.3     +105%
   Shareholders’ Equities
                                               7,300.0             6,414.9     +14%
   (excluding Minority Interest)
   Bank Borrowings                              207.3                 11.7   +1,672%
   Total Bank Balances                         6,467.5             1,272.7    +408%
   Interest Coverage Ratio (times)               89.0                78.7      +10.3
   Current Ratio (times)                           4.7
                                                   47                  24
                                                                       2.4      +2.3
                                                                                +2 3
   Debts to Total Assets Ratio                  19.6%               11.9%     +7.7Pts
   Loans to Total Assets Ratio                   2.2%                0.2%     +2.0Pts
   Return on Total Assets (ROA)                 15.0%               11.4%     +3.6Pts
   Return on Equity (ROE)                       18.5%               14.1%     +4.4Pts




                                                                                        27
Cash Flow Summary


  (HK$ mn)                                                2010      2009


 Cash & Cash Equivalents – Beginning
              q              g     g                     ,
                                                        1,194.5    ,
                                                                  1,309.1

 Cash Inflow (outflow)

   (Used in)/ Generated from operating activities       (197.4)
                                                        (197 4)    335 4
                                                                   335.4

   Generated from/ (Used in) investing activities       5,261.7    (52.3)

   Generated from/ (Used in) financing activities         27.9    (398.7)

 Net increase (decrease) in cash and cash equivalents   5,092.2   (115.6)

 Exchange difference
       g                                                  13.1        1.0

 Cash & Cash Equivalents- End                           6,299.8   1,194.5




                                                                            28
Capital Expenditure

Capex
Cape in 2010                      (HK$ mn)   Capex Plan in 2011                 (HK$ mn)

Service Network Construction in              Capacity Expansion in Production
Marine Equipment and Spare           32      of Marine Coatings – Investment       154
Parts Supply                                 i J t COSCO Qi d plant
                                             in Jotun         Qingdao l t
Investments in COSCO Kansai                  Other Expenses on Operating
                                      7                                            38
Zhuhai Plant Phase II                        Facilities
Other Expenses on Operating                  Potential Investment in Shipping
                                      5                                          3,000
Facilities                                   Services

Total                               44       Total                               3,192




                                                                                           29
Outlook and
Development Strategy




                       30
Outlook

                      Ship Trading Agency Services
      Total number of new build deliveries in 2011 will remain at a high level according to
      orderbook, but will start to decline in 2012 by 10-20%.
      It is difficult to see a substantial growth in the total number of global newbuild
      contracts in 20112011.


               Marine Insurance Brokerage Services
      Increase in new build deliveries in 2011 will bring new demand to marine insurance.
      Somali piratic activities further expand the business of pirate hostage ransom
      insurance and rent loss insurance.


          Supply of Marine Equipment and Spare Parts
      Shipping companies will continue to stringently cut ship repairing and maintenance
         t
      cost.
      The two overseas service network companies (Shin Chung Lin in Japan and Xing
      Yuan in Singapore) will help to further increase sales volume in 2011.




                                                                                              31
Outlook
                              Production and Sales of Coatings

                 The total production volume of new containers in China is expected to be 2.5-3 mn
  Container      TEUs in 2011* (vs 2.7 mn TEUs in 2010) , representing a stable demand for
  Coatings       container coatings.


                 China’s implementation of the “Twelfth Five-year Plan” will continue to increase the
  Industrial
Anti-corrosion
Anti-            coatings demand in the industries such as new energy, machinery and equipment,
  Coatings       and ancillary industries.



                 The demand for new build marine coatings in 2011 will remain strong due to the high
   Marine        number of scheduled new ship deliveries by China shipyards.
  Coatings
                 The construction of Jotun COSCO Qingdao plant ** is scheduled to complete in
                 1H2012,
                 1H2012 which will solve the problem of capacity shortage and save logistic cost in
                 supplying coatings to shipyards in northern China.




                                   *According to latest industry statistics and estimate
                                   ** Its annual capacity is 50 million litres or about 72,000 tons.    32
Outlook
                             Trading and Supply of Marine Fuel
   The steady growth of the global total marine fuel demand and the huge market in the major
   refueling ports in Asia provide us ample room for future business volume growth.
   Marine bunker volume in 2010:
        - Global total: 370 million tons (2020E: 450 million tons, with a steady 2% annual growth rate)
        - Singapore: 41 million tons
        - Hong Kong: 10 million tons
   Future expansion plan:
        integrated business model for a higher margin: control of strategic operating assets of the
        marine fuel supply chain

             Oil Producers                                    Physical                 Shipping
                                       Traders
              and Refiners                                   Suppliers               Companies

                                 Access to Credit        Facilities required
                                 Relationship with         Storage tanks - storage and blending
                               suppliers and customers     Bunkering barges - delivery

         Strategic locations: Singapore, Hong Kong and major ports in China Mainland
         Economies of scale

                                                                                                          33
Strategies in 2011

     Actively seek development opportunities in core business
     and try to achieve further progress in the development of
     marine bunker supply business through acquisitions

     Explore new value-added services to increase profit drivers
     along value chain

     Increase customer base by targeting new Chinese
     investors in shipping

     Further expand service network for better geographical
     presence

     Increase synergies across business segments



                                                                   34
Thank you!
IR Team Contact
Ms. Yang Ling
Tel: 852 2809 7810
Email: yangl@coscointl.com


Mr. Wilson Lo
Tel: 852 2809 7800
Email: lows@coscointl.com
Appendix




           36
Corporate Profile – Corporate Structure
                      COSCO Group

                                100%
                 COSCO (HK) Group Ltd                                                         Public shareholders
                                59.9%                                                        40.1%


                                                                   (00517.HK)
                                               COSCO International (00517 HK)




                         M i Insurance
                         Marine I                 Marine Equipment &     P d ti and
                                                                         Production d                Marine Bunker       G
                                                                                                                         Generall
Ship Trading Agency
                            Brokerage             spare parts supply     Sale of Coatings               Supply           Trading


     100%                                                                                                              100%
                        100%                      100%                   63%-65%                     100%
COSCO International                                                                                                     COSCO
                           COSCO (HK)              Yuantong Marine       COSCO Kansai                 Sinfeng Marine
   Ship Trading                                                                                                         International
                         Insurance Brokers             Service           Paint & Chemicals            Services          Trading

                        55%
                                                                         50%                         18%
                         Shenzhen COSCO
                         Insurance Brokers                                Jotun COSCO
                                                                                                       Double Rich
                                                                          Marine Coating



                           HK-based                   provider,
 COSCO International is a HK based shipping services provider offering diversified and specialized shipping related
 services or products to customers such as shipping companies, ship yards, container manufacturers, etc.

                                             *As of 31 Dec 2010, the total number of issued shares is 1,511,069,429.                    37
Corporate Profile - Corporate History


                                                                                       2008
                                                                                       Acquired COSCO
                                                                                       Int’l Trading

                                                                  2006
                                         2004                     Interests in Sino-Ocean                     2010
                                         Acquired COSCO           diluted from 44% to 30%;                    Acquired Xing Yuan and
                                         Insurance Brokers        disposed interests of a                     established Shin Chung
                                         and Yuantong (marine     power plant in Henan                        Lin, the expansion of
                                         equipment supply)                                                    marine equipment supply
                                                                                                                              g p
                                                                                                              business in Singapore
                                                                                                              and Japan
                               2003
                               Acquired COSCO                                                                   Disposed all shares of
                               Kansai Companies                                                                Sino-Ocean with net
 1992                          (container coatings)                               2007                         sales proceeds of
 Shun Shing Construction                                                          Commenced the                HK$5.26 billion
 was incorporated and listed                                                      construction of
 on the main board of HKSE                                   2005                 COSCO Kansai
                                                             Established          Zhuhai plant          2009
                                                             Jotun COSCO                                Acquired 18% of Double
                               2002                                                Interests in Sino-
                               Acquired COSCO Ship
                                                             (marine coatings)
                                                                                   Ocean diluted to     Rich and established
                               Trading, the beginning        Disposed              20% after its IPO;   Sinfeng Marine Services,
                               of the development of         property              divested building    the first expansion in
                               shipping services             investments in        construction         marine fuel supply
                                                             Hong Kong             business & a
              1997
              COSCO HK acquired                                                    property
    1997      Shun Shing Construction                                              investment in                             2010
              and renamed as COSCO                                                 Shenyang
              I t    ti   l
              International.                                                     Development of core business - shipping services
                                                                                 Divestment of non-core business

                                                                                                                                         38
Corporate Profile - Competitive Advantages

                                          gp          p y      pp
                                With strong parent company’s support

                                              COSCO Group*

            52.8%                     50.7%                       100%                      53.35%

    China COSCO              COSCO Shipping            COSCO (HK) Group            COSCO Corporation         Other Major Unlisted
   1919 HK /601919.SH
   1919.HK /601919 SH            600428.SH                                              COSC.SI
                                                                                        COSC SI
                                                                                                             C      i
                                                                                                             Companies
                           Specialized Shipping                   59.9%
            42.7%                                                                  Ship Repair
                                                                                   Ship Building             COSCO Dalian (100%)
   COSCO Pacific                                       COSCO International                                   Tanker Shipping
                                                                                   Marine Engineering
       1199.HK                                                517.HK


                                                      Shipping Services                                      COSCO Shipbuilding
  Container Shipping                                                                                         Industry Co. (100%)
  Dry Bulk Shipping                                                                                          Shipbuilding
  Logistics
  Terminal Operation                                                                                         CHIMBUSCO (50%) **
  Container Leasing                                                                                          Marine Bunker Supply

                                                                                                             ……
    * China Ocean Shipping (Group) company, a 100% state-owned company in China, is the world second largest shipping
    conglomerate operating a fleet of 778 ships or 57 7 million DWTs as of 31 Dec 2010
    conglomerate,                                  57.7                           2010.
    **China Marine Bunker (Petro China) Co., Ltd., a 50:50 JV of COSCO Group and Petro China.


                                                                                                                                    39
 Corporate Profile - Competitive Advantages

                    Significant Synergies across our Business Segments

                           Ship Trading Brokers   Insurance Brokers



Our                                                                                              Container
                 Ship Builders                    Ship Owners        Ship Operators
Customers:                                                                                      Manufactures




             Marine Coatings     Supply of Equipment & Spare Parts     Supply of Marine Fuel   Container Coatings




                 COSCO International: a Specialized and Integrated Shipping Related Services Provider




                                                                                                                    40
Disclaimer

  This presentation contains certain forward-looking statements with respect to the financial
  condition, results of operations and business of COSCO International and certain plans and
  prospects of the management of COSCO International.

  Such forward-looking statements involve known and unknown risks, uncertainties and other
  factors which may cause the actual result or performance of COSCO International to be
  materially different from any future results or performance expressed or implied by such forward
        g                                      g
  looking statements. Such forward- looking statements are based on numerous assumptions     p
  regarding COSCO International’s present and future business strategies and the political and
  economic environment in which COSCO International will operate in the future.

         p             ,      y                      y                              p
  The representations, analysis and advice made by COSCO International in this presentation
  shall not be construed as recommendations for buying or selling shares of COSCO International.
  COSCO International shall not be responsible for any action or non-action made according to the
  contents of this presentation.




                                                                                                     41

								
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