Seacon Shipping Demonstrates Resilience Through Market Cycles with Fleet Expansion and Outperforming Results!

Seacon Shipping Group Holdings Limited ("Seacon Shipping" or the "Company", 02409.HK), a rising Chinese player in the global shipping market, has delivered a resilient set of financial results for the first half of 2025, navigating challenges in the dry bulk and tanker sectors.

Shipping Business Outperforms Market; Strong Ship Management Growth

For the six months ended June 30, 2025, Seacon Shipping reported total revenue of US$137.4 million, remaining largely flat compared to the same period last year. Net profit was US$23.03 million, compared to US$32.56 million in H1 2024.

Specifically, against a backdrop of the average Baltic Dry Index (BDI) and average Baltic Clean Tanker Index (BCTI) declining by approximately 30% and 32% year-on-year (YoY) respectively, revenue from the Company's shipping business decreased to US$80.512 million from US$104 million a year earlier. However, leveraging its "asset-light and asset-heavy" hybrid fleet strategy and asset rotation, Seacon Shipping partially offset market volatility, with its shipping segment performance still outperforming the overall market.

The dry bulk shipping market faced challenges from seasonal softness and macroeconomic uncertainties in H1 2025. Freight rates generally weakened due to decreased tonne-mile demand for major commodities like coal, iron ore, and grains, coupled with concentrated vessel dry-docking schedules. The BDI opened the year at 997 points, dipped to a low of 715 points in January, before recovering to reach 1,975 points in mid-June and closing the period at 1,489 points. The average index for H1 2025 was 1,290 points, significantly lower than the 1,836 point average in H1 2024.

In this environment, several listed shipping companies saw significant profit declines. For instance, Pacific Basin Shipping Limited (02343.HK), also listed in Hong Kong, reported a 21% YoY decrease in revenue to US$1.02 billion and a 56% drop in net profit to US$25.6 million for H1 2025. Star Bulk Carriers Corp. (SBLK), listed on NASDAQ, barely remained profitable, with total revenue falling 21.9% YoY to US$480 million and net profit plunging 99.7% to US$501,000.

The strong performance of Seacon Shipping's other core business segment, Ship Management, served as a key "stabilizer," hedging against the shipping cycle. Benefiting from an increase in vessels under full technical management (FTM) contracts and overall expansion of the managed fleet, revenue from the Ship Management business surged to US$56.859 million in H1 2025, a 72.7% increase YoY. Pre-tax profit for the segment rose 103.7% to US$8.114 million, with the profit margin expanding to 14.3%, providing a robust hedge against the weaker freight rate environment.

Fleet "Diversification" and "Youngization" Advance Simultaneously

Seacon Shipping continues to expand its fleet scale while simultaneously driving fleet "youngization" and portfolio diversification.

The Company currently owns and operates a modern and flexible dry bulk fleet, including Capesize, Panamax, Ultramax, Supramax, Handymax, and Handysize vessels, as well as core vessel types such as tankers and chemical tankers.

According to its financial report, Seacon Shipping expects to take delivery of 5 newbuilds, 4 bareboat chartered-in vessels, and 1 chemical tanker from a joint venture in the second half of 2025, adding approximately 425,700 deadweight tons (DWT).

More strategically, the Company has 18 owned/bareboat chartered newbuilds and 21 joint venture/bareboat chartered newbuilds on order. This pipeline includes 15 bulk carriers, 15 chemical tankers, 6 MR product tankers, 2 LNG bunkering vessels, and 1 container ship. Scheduled for delivery between H2 2025 and early 2028, these vessels will cumulatively add approximately 1.0819 million DWT, laying a solid "capacity foundation" for medium-to-long-term scale and structural optimization.

Two Ship Deliveries in Two Days; Fleet Expands Further

Coinciding with the earnings period, Seacon Shipping welcomed the delivery of two new vessels, expanding its owned fleet to 41 ships with total controlled capacity exceeding 1.5 million DWT.

On August 25, an 18,500 DWT oil/chemical tanker (Hull No. DN517-2), built by Fujian Southeast Shipyard (a subsidiary of Fujian Shipbuilding Industry Group) for Seacon Shipping, was delivered three months ahead of schedule. The delivery ceremony was attended by representatives including Mr. Huang Rutang, Vice General Manager of Fujian Shipbuilding Industry Group and Chairman of Fujian Shipbuilding Industry; Mr. Guo Jinkui, Chairman of Seacon Shipping; Mr. Zhu Jiafeng, General Manager of the shipping subsidiary of ICBC Financial Leasing Co., Ltd.; and Mr. Chen Biao, Vice President of Bureau Veritas Marine & Offshore China. Ms. Li Ling, General Manager of Jiangmen Canny Chemical Co., Ltd., served as the godmother and named the vessel "GOLDEN CEDAR."

The "GOLDEN CEDAR" has a length overall (LOA) of 149.8 meters, a beam of 22.8 meters, and a depth of 12.7 meters. It can transport crude oil, petroleum products with a density below 1.54 t/m³, and chemicals (Category II and III), including those listed in MARPOL Annex I and the IBC Code. Featuring multiple load line designs to meet different flag state and port regulations, the vessel offers high efficiency, environmental friendliness, and safety. It will primarily serve the international oil and chemical shipping market.

A day later, Seacon Shipping announced the delivery and naming ceremony of a newly built 62,000 DWT multi-purpose heavy lift vessel constructed by Huanghai Shipbuilding Co., Ltd.

The ceremony was witnessed by guests including Mr. Zhao Jianping, Chairman of Huanghai Shipbuilding Co., Ltd.; Mr. Liu Xianghao, Deputy Party Secretary of COSCO Shipping Specialized Carriers Co., Ltd.; Mr. Chen Zekai, President of Seacon Shipping; Mr. Zhao Yang, General Manager of the Shipping Department of China Merchants Group Financial Leasing Co., Ltd.; Mr. Tian Zhaobo, Deputy General Manager of CCS Qinghai Branch; and Mr. Zhang Yan, Executive Director and General Manager of Beijing COSCO Shipping vessel Trading Co., Ltd. Ms. Xu Yan, Deputy Party Secretary and General Manager of Shanghai United Assets and Equity Exchange, served as the godmother and named the vessel "JU FU."

The "JU FU" has an LOA of 199.9 meters, a beam of 32.26 meters, and a depth of 19.3 meters. It offers flexible cargo handling for heavy lift project cargo of various sizes and containers, as well as general dry bulk commodities. Its deployment will strengthen Seacon Shipping's capability in heavy lift/project cargo and multi-cargo transportation, enhancing the fleet structure to meet diverse operational scenarios.

Multi-Layered Strategy Enhances Cyclical Resilience

A closer look at the financial report reveals that beyond fleet expansion and renewal, Seacon Shipping is strengthening its ability to withstand cyclical fluctuations through a multi-layered strategic layout.

On one hand, the Company adheres to its "asset-light and asset-heavy" hybrid strategy, using owned vessels to enhance gross margin and market influence while utilizing chartered-in vessels to maintain flexibility and low capital expenditure, amplifying gains during upturns and mitigating risks during downturns. On the other hand, the Company is exploring a "platform" approach, integrating investment, operation, and management across the value chain: acquiring assets at low points, deepening operations during stable periods, and divesting at high points, establishing a normalized asset operation mechanism. This model aims to generate returns beyond mere freight rate cycles.

Regarding the green transition, Seacon Shipping is at the forefront. A younger fleet structure, ongoing energy efficiency retrofits, and the application of digital dispatch allow the Company to maintain unit cost advantages amid rising fuel, carbon emission, and compliance costs, while also achieving a service quality premium. This aligns with long-term industry trends and provides a competitive edge.

The "twin engines" of globalization and digitalization are another highlight for Seacon Shipping this year. In H1 2025, the Company continued to improve its global network. Following the establishment of its German office, its regional office in Melbourne, Australia, became operational, enhancing local service capabilities and response efficiency. The Ship Management business maintained its position among the top ten globally in the Lloyd's List ranking (9th in 2024), further consolidating its brand potential. In digitalization, Seacon Shipping developed its integrated shipping management system and built a big data platform with the "Seacon-AI" model, enabling the concentration, integration, and real-time interaction of operational information. This supports refined management and cost control, providing a "data hub" for scaled operations.

Looking ahead, Seacon Shipping stated that post-reporting period, it will continue its vessel replacement plan to optimize the fleet scale and improve working capital liquidity. Through ongoing vessel investment activities, the Company will persistently seek opportunities to generate additional financial returns on top of its stable business base. As the Company phases out and renews its fleet in a timely manner, it aims to capture greater market share with vessels that better comply with the latest international standards and offer advantages in fuel consumption and carbon tax considerations.

Regarding the Ship Management business, the Company will continue to consolidate its market leadership, leveraging its position as the world's ninth-largest and China's largest third-party ship management service provider to actively capitalize on future opportunities driven by policy changes. The Company will also continue to expand its key ship management bases to better meet market demand with improved services.

This interim report from Seacon Shipping reveals that the focus lies less on short-term profit fluctuations and more on the long-term adjustment of the fleet structure and the enhancement of its ability to navigate market cycles. The Company uses the certainty of its management business to hedge against freight rate volatility and leverages its younger fleet and green/digital capabilities to pre-optimize future compliance and cost curves. Coupled with the dense delivery schedule of newbuilds and a normalized rhythm of asset operations, Seacon Shipping's framework for cycling through market cycles has largely taken shape.

As global macroeconomics and trade show moderate recovery, supporting demand, and with net fleet growth remaining modest alongside accelerated scrapping of older vessels driven by stringent environmental regulations, industry supply and demand are expected to become more orderly. Supported by its newbuilding pipeline, global network expansion, and its brand and scale as China's largest third-party ship management service provider, Seacon Shipping is poised to continuously widen its moat across both "Scale × Efficiency" dimensions.

 News Source: MarineCircle