China Merchants Energy Shipping: Expected that the relevant shipping market spot freight rates will continue to face the risk of severe fluctuations

The stock price has increased nearly 28% over three days. China Merchants Steamship issued a notice of abnormal trading, stating that the relevant shipping market spot freight rates are expected to continue facing significant volatility.

On February 26, China Merchants Energy Transportation Co., Ltd. (China Merchants Steamship, 601872.SH) released an announcement regarding abnormal stock trading fluctuations, stating that the company’s recent production and operations are normal. Influenced by multiple factors affecting supply and demand in the market, the international oil tanker market has continued to rise sharply, with significant increases in oil tanker asset prices; driven by strong demand in the Cape of Good Hope, Panama, and other dry bulk shipping markets, the BDI index during the Spring Festival off-season also exceeded industry expectations.

The announcement pointed out that the company’s stock prices closed with a cumulative deviation of over 20% for three consecutive trading days on February 24, 25, and 26, which qualifies as abnormal stock trading under relevant regulations.

After verification with the company’s controlling shareholder and actual controller, they confirmed that, aside from previously disclosed matters, no major asset restructuring, acquisitions, debt restructuring, business restructuring, asset stripping, or asset injections involving the listed company are currently being planned. Additionally, the company has not found any media reports or market rumors that significantly impact the company’s stock trading prices, nor are there any involving market hot concepts.

Data shows that before February 26, China Merchants Steamship achieved three days of trading limits within four days; during the three trading days after the Spring Festival holiday, its stock price increased by nearly 28%. As a leading company in the global VLCC market, the sharp rise in China Merchants Steamship’s stock price may directly benefit from the significant increase in oil tanker freight rates during the Spring Festival holiday. Recently, the shipping sector has performed well overall in the capital markets.

According to the latest research report from Huachuang Securities, VLCC freight rates continued to rise during the Spring Festival holiday, reaching the highest level in nearly ten years. As of February 20, 2026, Clarkson VLCC-TCE closed at $142,000 per day, up 24.5% week-over-week; the Middle East-China route closed at $157,000 per day, up 26% week-over-week. The one-year VLCC charter rate also continued to rise to $92,500 per day, up 28.5% week-over-week. The firm believes the VLCC market is experiencing near-unprecedented bullish sentiment, mainly driven by three factors: ongoing geopolitical tensions between Iran and the U.S. increasing risk premiums; Longjin’s aggressive “buying,” increasing fleet concentration and market volatility; and intensified sanctions boosting compliant trade demand.

It is worth noting that China Merchants Steamship also warned in the announcement that the company currently expects the spot freight rates in the relevant shipping markets to continue facing significant volatility, with many uncertainties in freight rate trends. Both upside and downside risks are difficult to accurately predict at this time. The company’s subsequent production and operational activities face opportunities and challenges. Additionally, stock market and related sector prices may continue to fluctuate sharply, and the company’s stock price and trading volume may continue to experience significant volatility.

Furthermore, according to the announcement, China Merchants Steamship disclosed on January 14 its “Share Reduction Plan for Directors and Senior Management’s Equity Incentive Shares.” Directors Wang Yongxin, Xu Hui, Hu Bin, and Kong Kang plan to reduce their holdings by a total of no more than 648,600 shares via centralized bidding from February 4 to April 30, representing no more than 0.008033% of the company’s total share capital. Each person’s reduction will not exceed 25% of their total holdings at the beginning of the year, with the reduction price determined by the market price at the time of implementation. As of the date of this announcement, the share reduction plans for these directors and senior managers have been carried out as scheduled.

Official information shows that China Merchants Steamship was listed on the Shanghai Stock Exchange in December 2006 and quickly became a major component of key indices, making it one of China’s blue-chip stocks. The company’s main business includes oil product transportation, gas transportation, dry bulk shipping, roll-on/roll-off (RoRo) shipping, and container transportation, aiming to build a comprehensive shipping network covering oil and gas, dry bulk, and other sectors. The company currently operates and manages over 350 ships, ranking among the largest globally, with leading VLCC and VLOC fleets, a top-tier LNG fleet, a domestic-leading RoRo fleet capable of transporting over one million vehicles annually, and a container fleet serving major ports along China’s coast and in the Asia-Pacific region.

In terms of performance, previous earnings forecasts indicated that the company expects net profit attributable to shareholders for 2025 to be between 6 billion and 6.6 billion yuan, representing a year-over-year increase of 17% to 29%. The net profit excluding non-recurring gains is expected to be between 5.005 billion and 5.605 billion yuan, with a slight decrease of 0.2% to an increase of 12% year-over-year.

The expected profit increase last year was mainly due to the oil tanker fleet seizing market recovery opportunities, with operating profit in the fourth quarter projected to increase by 200% to 230% year-over-year. Additionally, benefiting from various factors, the company expects a significant increase in non-recurring gains during the reporting period, mainly from the disposal of old ships at favorable prices and gains from fair value changes on the acquisition of Antong shares (accounted for using the equity method starting from the fourth quarter). The dry bulk and RoRo fleets are expected to see a temporary decline in operating profits during the reporting period.