Cosco Shipping Development Co.,Ltd. (SSE: 601866) has announced a significant fleet expansion plan through its subsidiaries. The company intends to order a total of 15 new 210,000 deadweight tonnage (DWT) bulk carriers.

The project will be executed via its subsidiary, Hainan Haifa Shipping. The company has entrusted Waigaoqiao Shipyard, a subsidiary of China State Shipbuilding Corporation (CSSC), to build 10 vessels, and Xiamen Xiangyu's subsidiary, Xiangyu Haizhuang, to construct the remaining 5 vessels.

The total transaction value is CNY 7.92 billion (excluding tax). The contracts for the 10 vessels from CSSC are valued at CNY 5.28 billion (excluding tax), while the 5 vessels from Xiangyu Haizhuang are valued at CNY 2.64 billion (excluding tax). Each individual vessel will be covered by a separate construction contract, with a fixed price of CNY 528 million (excluding tax) per ship.

Where to start

This strategic move is designed to leverage the company's strengths in the industry-finance synergy model. By expanding its fleet with modern large-scale bulk carriers, the company aims to enhance the scale and quality of its shipping assets.

Purpose behind the 15-vessel order

This initiative will help refine the company's asset allocation in the large bulk carrier segment. It is intended to solidify the foundation of its ship leasing business, contributing long-term, stable revenue and cash flow generation.

Furthermore, the expansion aims to improve the company's overall financial stability and strengthen its sustainable development momentum. By collaborating with upstream and downstream companies in the shipping supply chain, Cosco Shipping Development Co.,Ltd. seeks to deepen its application in the "build, lease, and operate" model, ultimately enhancing its competitive edge in the international shipping market.