2019 Important notice The Board of Directors (the “Board”), the Supervisory Committee (the “Supervisory Committee”), the directors (the “Directors”), the supervisors (the “Supervisors”) and senior management of COSCO SHIPPING Holdings Co., Ltd. (the “Company” or “COSCO SHIPPING Holdings”, together with its subsidiaries, the “Group”) declare that there are no false information, misleading statements or material omissions in this annual report, and collectively and individually accept full responsibility for the truthfulness, accuracy and completeness of the information contained herein. All Directors attended the Board meeting held on 30 March 2020. ShineWing Certified Public Accountants, LLP and PricewaterhouseCoopers have issued standard and unqualified auditor’s reports for the Company. The authorized person of the Company, Mr. Xu Lirong (chairman), Mr. Yang Zhijian (executive Director and general manager), Mr. Zhang Mingwen (person-in-charge of accounting) and Mr. Xu Hongwei (head of the accounting department), declare that they confirm the truthfulness, accuracy and completeness of the financial reports in this report. Proposals for profit distribution and reserves capitalization during the year ended 31 December 2019 (the “Reporting Period”) as considered by the Board: Pursuant to the audited financial statements of the Company for the year 2019, which were prepared in accordance with Hong Kong Financial Reporting Standards, the profit attributable to equity holders of the Company for 2019 was RMB6.690 billion. Since total net profit attributable to owners of the parent company of COSCO SHIPPING Holdings for the year was used to recover previous years’ losses, the aggregate undistributed profit was negative. According to the relevant requirements under the Company Law (the “Company Law”) of the People’s Republic of China (the “PRC”), no profit shall be distributed provided that the aggregate undistributed profit of a company is negative. After due consideration, the Board recommended that no profit should be distributed for 2019. The proposal will be submitted to the 2019 annual general meeting for consideration. Is there any occupancy of non-operating funds by controlling shareholders or its related parties? No. Are there any guarantees provided to a third-party in violation of stipulated procedures? No. Forward-looking statements None of the forward-looking statements including future plan in this annual report constitutes a commitment by the Company to the investors. Investors are advised to be aware of the investment risks. Material risk warning Investors are advised to read the “Potential risks” of “Management Discussion and Analysis” as set out in this annual report carefully. Miscellaneous For details, please refer to the sub-section headed “Other Significant Events” in the section headed “Management Discussion and Analysis” of this annual report. Contents Inside Cover Important Notice 2 Company’s Basic Information 5 Chairman’s Statement 12 Summary of Accounting Data 13 Management Discussion and Analysis 38 Significant Events 44 Changes in Equity and Shareholders’ Information 49 Corporate Bonds 53 Directors, Supervisors and Senior Management 62 Corporate Governance Report 99 Directors’ Report 140 Report of Supervisory Committee 142 Independent Auditor’s Report 150 Consolidated Balance Sheet 152 Consolidated Income Statement 154 Consolidated Statement of Comprehensive Income 155 Consolidated Statement of Changes in Equity 157 Consolidated Cash Flow Statement 159 Notes to the Consolidated Financial Statements 284 Five Year Financial Summary Company’s Basic Information I. Company’s Information Legal Chinese name 中遠海運控股股份有限公司 Legal Chinese stock short name 中遠海控 English name COSCO SHIPPING Holdings Co., Ltd. English stock short name COSCO SHIP HOLD Legal representative XU Lirong II. Contact Persons and Methods Secretary to Board of Directors Representative of securities affairs Name GUO Huawei XIAO Junguang, ZHANG Yueming Contact address 8/F, No. 658 Dong Da Ming Road, 8/F, No. 658 Dong Da Ming Road, Shanghai, the PRC Shanghai, the PRC Telephone (8621) 60298619 (8621) 60298619 Facsimile (8621) 60298618 (8621) 60298618 E-mail [email protected] [email protected] [email protected] III. Basic Profile Registered address 2nd Floor, 12 Yuanhang Business Centre, Central Boulevard and East Seven Road Junction, Tianjin Port Free Trade Zone, Tianjin, the PRC Annual Report 2019 Postal code 300461 Place of business 8/F, No. 658 Dong Da Ming Road, Shanghai, the PRC Postal code 200080 Company’s website http://hold.coscoshipping.com COSCO SHIPPING Holdings Co., Ltd. Company’s email [email protected] 2 Company’s Basic Information IV. Information Disclosure and Inspection Designated newspapers for Shanghai Securities News, China Securities Journal, Securities Times, Securities disclosure of the Company’s information Daily Website designated by the www.sse.com.cn China Securities Regulatory Commission (“CSRC”) for publishing the annual report Place for inspection of annual report 8/F, No. 658 Dong Da Ming Road, Shanghai, the PRC V. Information on the Company’s Shares Shares of the Company Stock short name Type of share Place of listing Stock short name Stock code before change A Shares Shanghai Stock Exchange COSCO SHIP HOLD 601919 China COSCO H Shares Hong Kong COSCO SHIP HOLD 01919 China COSCO Stock Exchange COSCO SHIPPING Holdings Co., Ltd. Annual Report 2019 3 Company’s Basic Information VI. Other Information Domestic auditor engaged Name: ShineWing Certified Public Accountants, LLP by the Company Office address: 8/F, Block A, Fu Hua Mansion, No. 8 Chao Yang Men Bei Da Jie, Dongcheng District, Beijing, the PRC Name of signing auditor: Wang Hui, Wang Jinli International auditor engaged PricewaterhouseCoopers by the Company Certified Public Accountants Registered Public Interest Entity Auditor 22nd Floor, Prince’s Building, Central, Hong Kong Other information Place of business in Hong Kong 48/F, COSCO Tower, 183 Queen’s Road Central, Hong Kong Major bankers Bank of China, Agricultural Bank of China, China Merchants Bank, etc Legal advisers as to Hong Kong law Paul Hastings Address: 21/F-22/F, Bank of China Tower, 1 Garden Road, Hong Kong Legal advisers as to PRC law Commerce and Finance Law Offices Address: 6th Floor, NCI Tower, A12 Jianguomenwai Avenue, Beijing, the PRC Domestic A share registrar and transfer office China Securities Depository and Clearing Corporation Limited, Shanghai Branch Address: 36th Floor, China Insurance Building, 166 Lujiazui Road East, Pudong New District, Shanghai, the PRC Annual Report 2019 Hong Kong H share registrar and transfer office Computershare Hong Kong Investor Services Limited Address: 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong COSCO SHIPPING Holdings Co., Ltd. 4 Chairman’s Statement Dear Shareholders, First of all, on behalf of the Board and the management of COSCO SHIPPING Holdings, I would like to express my sincere gratitude to all our shareholders and customers around the world for their continuous attention and support to COSCO SHIPPING Holdings. Meanwhile, I would also like to thank all of our staff, onshore and offshore, for their diligence and tenaciousness. Thanks to the joint efforts of everyone, COSCO SHIPPING Holdings achieved outstanding results over the past year. In 2019, the global economic and trade situation faced severe challenges. Economic growth had hit a new low since the financial crisis, and the demand growth in container shipping had slowed year-on-year. However, in the face of challenges, COSCO SHIPPING Holdings adhered to the guiding principle of “outperform the market, drive innovation, and lead the era” and the Ocean & Plus strategy, to deeply facilitate various work including globalization, quality, digitalization and end-to-end business development. Through the collaboration of the dual-brand fleets and the cooperation between port and shipping operations, the Company continued to improve quality and efficiency, and realized synergies in various aspects, which significantly improved the Company’s operating performance. During the Reporting Period, the net profit attributable to equity holders of the Company amounted to RMB6,690 million, representing a year-on-year increase of RMB5,460 million or 443.9%, and the basic earnings per share amounted to RMB0.55 per share. The operating performance of the Company’s container shipping business improved significantly year-on-year. Earning before interest and tax (“EBIT”) of container shipping business reached RMB6,620 million (equivalent to US$960 million), representing a year-on-year increase of 65.1%, and EBIT Margin of container shipping business increased to 4.6% from 3.5% of 2018. Orient Overseas (International) Limited (OOIL), a subsidiary of the Company, completed the sale of LBCT LLC, which generated a one- time net income, achieved good shareholder returns, and recovered a large amount of cash. In addition, the Company raised approximately RMB7.7 billion through the A-share non-public offering in January 2019. As at 31 December 2019, the Company’s net debt to total equity ratio decreased to 101.54% from 185.2% as at the end of 2018. In 2019, for the container shipping business, the Company handled shipping volume of 25.739 million TEUs, up by 18.1% as compared to 21.792 million TEUs in 2018 (if on the comparable basis, representing a year-on-year increase of 2.7%). Among which, COSCO SHIPPING Lines handled the shipping volume of 18.785