On March 24, Xingtong Co., Ltd., a leading enterprise in China’s dangerous chemical shipping industry, landed on the main board of Shanghai Stock Exchange. This is the second domestic chemical shipping company listed in the past year, and it is also the second listed company of A-share, which is mainly engaged in domestic dangerous chemical shipping.
According to public data, benefiting from the rapid development of petrochemical industry, China’s hazardous chemicals logistics and transportation market shows a steady growth trend, and the market scale is expected to grow to 2.85 trillion yuan by 2025.
In recent years, the private dangerous chemicals shipping company represented by Xingtong Co., Ltd. has rapidly expanded its transportation capacity with strength and established cooperative relations with large petrochemical enterprises such as Sinopec, Fujian United Petrochemical, CNOOC, Zhejiang Petrochemical, Hengli Petrochemical Co.Ltd(600346) and so on.
According to the data, from 2019 to 2021, Xingtong achieved revenue of 292 million yuan, 386 million yuan and 567 million yuan respectively, and net profit of 868135 million yuan, 123 million yuan and 199 million yuan respectively, showing a continuous growth trend. The revenue from chemical transportation has accounted for more than 80% of the revenue in the last three years. From the perspective of comprehensive gross profit margin, the gross profit margin of the company has remained above 50% in recent three years.
Insiders told the reporter of Securities Daily that China’s transport capacity control is still relatively strict. According to the data of the Ministry of transport, from 2018 to 2021, the year-on-year growth rate of China’s inter provincial bulk liquid chemical ship capacity was 6.33%, – 0.58%, 8.42% and 6% respectively. Therefore, it is expected that the total market capacity will not expand significantly in the short term.
Chen Qilong, vice chairman and general manager of Xingtong Co., Ltd., said that the transportation of dangerous chemicals has high threshold requirements for the qualification of relevant enterprises. Large petrochemical enterprises will strictly screen transportation service providers and establish a resource database of qualified suppliers for the consideration of cargo transportation safety and quality. Transportation service providers entering the warehouse shall meet the qualification requirements, management systems and assessment procedures related to their supplier management.
Some analysts predict that in this case, the total market capacity is expected to be difficult to expand significantly in the short term, which is expected to increase the ship freight rate, which will have a positive effect on the improvement of the operating efficiency and profit level of enterprises in the industry.
As China started the upgrading of petrochemical industry with the construction of refining and chemical integration, the number of ten million ton large refineries in China continued to increase, and the oil refining and chemical capacity increased rapidly. China’s refining and chemical capacity increased from 12.32 million barrels per day in 2010 to 16.69 million barrels per day in 2020, with an annual compound growth rate of 3.08%, significantly higher than the global growth rate of 0.83%.
By the end of last year, there were 86 domestic chemical shipping companies, with an average of 33 ships and 18700 deadweight tons per company. Industry insiders believe that although the whole industry is in the stage of rapid development, there has been a relatively scattered problem in the domestic chemical shipping market. In addition, the dangerous chemicals business has a high threshold, and the operating enterprises and operating ships need to obtain the operation license of liquid cargo dangerous goods water transportation business in the corresponding region.
Xingtong Co., Ltd. is a leading enterprise in China’s coastal bulk liquid chemical shipping industry. Since 2012, Xingtong Co., Ltd. has accumulated 95500 DWT of newly added capacity of coastal inter provincial bulk liquid chemical ships, accounting for 22.32% of the newly added capacity of the market in the same period, ranking first in the industry. As of February 2022, Xingtong Co., Ltd. has 18 bulk liquid chemical ships, product oil ships and LPG ships, with a total capacity of 199000 DWT.
Chen Qilong said that as of December 31, 2021, the capacity of Xingtong bulk liquid chemical ship accounted for 9.97% of the total capacity of the segment market. The company raised 1.076 billion yuan for large-scale purchase of ships and digital shipping R & D projects. It is expected to further strengthen the company’s leading position in the industry by expanding the company’s transportation capacity.
