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Dear Shareholders,

First of all, on behalf of the Board, I would like to thank Mr. Xu Lirong, the former chairman, for his excellent leadership and his valuable contribution to the Company. Meanwhile, I would also like to express my appreciation and gratitude to our staff, both onshore and offshore, for their diligence and dedication.

In 2021, the Company witnessed both opportunities and challenges. Facing the repeated COVID-19 waves, coupled with increased transportation demand and restricted supply, the global logistics supply chain had been challenged by port congestion, container shortage and inland transportation delay, which led to a tightened supply and demand relationship of the container shipping market.

By adhering to the concept of providing “customer-centric” services, our relationship with our customers is the key to our success. Faced with the above challenges, the Company quickly adapted to market changes and kept providing service with high quality. We do our best to assist our customers in maintaining the stability of supply chains by optimizing the route network, adding capacity whenever possible, seeking new ways to co-operate with them on an end-to-end basis and taking advantages of digital technology. During this special period, our commitment and service performance of high quality help to deepen and extend our relationship with our customers.

During the Reporting Period, the Company displayed remarkable operation performance, and recorded new highs in its overall operating results, revenue from container shipping business and shipping volume. The Company recorded EBIT of RMB131.5 billion (equivalent to approximately US$20.38 billion), of which EBIT from container shipping business amounted to RMB127.7 billion (equivalent to approximately US$19.79 billion); the profit attributable to equity holders of the Company was RMB89.296 billion, representing an increase of RMB79.369 billion or 799.52% as compared to last year; and basic earnings per share was RMB5.59. During the year, the Company continued to optimize its financial structure which facilitated the distribution of annual cash dividends for this year. As at the end of 2021, the asset-liability ratio of the Company was reduced to 56.76%, representing a decrease of 14.3 percentage points as compared to the year end of 2020.

Comprehensively considering the Company’s sustainable development and return for the Shareholders, the Board recommends the Company to distribute a final dividend for the year 2021 of RMB0.87 per ordinary share (tax inclusive). Based on the Company’s total share capital of 16,014 million shares as at the end of 2021, the cash dividend of RMB13.932 billion in aggregate will be distributed.

Fully leverage the dual-brand scale advantages and optimize global network
To tackle the imbalance between the strong demand of transportation and the supply shortage of capacity, the Company’s dual brand, together with the members of the OCEAN Alliance, officially launched DAY 5 products, covering 39 routes with an aggregate capacity of 4.1 million TEUs. The Company continuously improved the operational efficiency of the dual brand fleet. In 2021, the available slots per week of Trans-Pacific trade and Asia-Europe trade increased 26% and 6% year-on-year respectively. Meanwhile, the Company strengthened its development in third-country markets, emerging markets and regional markets. During the Reporting Period, the cargo volume of the dual brand in emerging markets increased by 9% as compared to the same period of last year.

Leverage the advantages of industrial chain operation to improve the “end-to-end” transportation service
The Company is committed to creating a land-sea integrated operation model to ensure the stability of global industrial and supply chain and provide more reliable end-to-end services to customers. During the Reporting Period, the Company’s dual brand kept extending cargo sources in the European inland, achieving a rapid increase in cargo volume of China-Europe Sea-rail Express of 23% year-on-year. Meanwhile, there were 29 new sea-rail domestic and foreign trade corridors. China-Africa Rail-Sea Express and the Greater Bay Area – China Western Land-Sea Trade Corridor successfully commenced operation.

Take advantages of technology upgrade to lead the integration of digital ecosystem
During the Reporting Period, the Global Shipping Business Network (GSBN) jointly initiated by COSCO SHIPPING Lines, OOCL, COSCO SHIPPING Ports (each of which is a subsidiary of the Company) and five other internationally renowned liner companies and port operators announced the operation in 11 ports at home and abroad. GSBN has realized Cargo Release in Hong Kong, Singapore, Thailand and other countries and regions, which greatly simplified data exchange through the provision of paperless solution, and therefore improved customer experience and steadily strengthened its influence over the industry. In 2021, the Company’s e-commerce platform (Syncon Hub) was extended to Europe, North America, Southeast Asia, Australia and other regions, with the whole-process visualization being upgraded, and a related logistics product being launched. In 2021, the transaction volume of the e-commerce platforms for foreign trade recorded a growth of 187% year-on-year.

Actively fulfill corporate social responsibility and promote green and sustainable development
The company actively fulfills its corporate social responsibility by providing support to the container logistics supply chain and the smooth flow of the global supply chain through measures such as stabilizing transportation capacity, ensuring container supply and rendering excellent services. In 2021, the Company provided solutions to transportation problems, including launching 30 designated voyages on major routes such as the Trans-Pacific routes, Asia-Europe routes, Intra-Asia routes (towards Australia-New Zealand) and other international routes (towards Mexico). The Company also provided customized services by launching the “Express Service” in North America to overcome port congestion in certain areas. The Company widely received positive responses from customers, by shortening the whole transportation process of the Trans-Pacific route to 19 days.

The Company has always implemented the concept of “energy saving, carbon reduction and green development” into the operation and management of the Company, by adhering to environmental friendliness as well as balancing sustainable development and environmental protection. The dual brand fleet continued to reduce the impact of its business operations on the environment and lower carbon emissions through measures such as optimizing the fleet structure and route design, and effectively reducing fuel consumption. In addition, the 32 large container vessels ordered by the dual brand in 2020 and 2021 respectively met the Sulfur oxide (SOx) and Nitrogen oxides (NOx) emission standards required by IMO, as well as the medium-term target of “carbon emission reduction” in 2030.

Looking forward to 2022, the international economic and trade pattern will continue to undertake profound adjustments, and the global economy will gradually recover while the foundation is not quite solid. The uncertainty brought by such as COVID-19 waves and regional geopolitical events may hinder the economic recovery process. According to major international economic organizations, the world economy will continue to grow at a low rate in 2022.

Since the beginning of 2022, the container shipping market has overall continued the high level trend in 2021, and the demand was still elastic with pressure on the supply of effective fleet capacity caused by the continuous port congestion globally. Little improvement is anticipated in the tense market situation of supply and demand in the first half of 2022, and the market prospect is still cautiously optimistic in the short term. However, the repeated COVID-19 waves, global inflation, geopolitical tension and other events will bring uncertainties to the long-term performance of the market, and it is even more difficult to predict the future trend.

Be assured, no matter the challenges are, the Company will actively respond to the global economic and trade changes and fulfill the mission of shipping the world. We will continue working tirelessly and diligently in order to be at the forefront of our industry, as a Vital Link to World Trade. The Company will escort the stability of the global supply chain, provide better service to our customers. At the same time, the Company will make contributions in carrying out social responsibility, environment protection and emission reduction in terms of developing green, low-carbon and intelligent shipping, in order that the Company can create greater value for shareholders.

Chairman of the Board
30 March 2022

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