COSCO SHIPPING International Hong Kong : 2020 Interim Results

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Bermuda with limited liability)

(Stock Code: 00517)

2020 INTERIM RESULTS

RESULTS AND OPERATION HIGHLIGHTS

. Profit attributable to equity holders decreased by 12% to HK$131,625,000 which was mainly attributable to the decrease in interest income and the impact on certain business segments by the COVID-19 epidemic.

. Revenue decreased by 9% to HK$1,482,759,000 which was mainly attributable to the decrease in revenues of coatings, ship trading agency and general trading segments.

. Gross profit decreased by 3% to HK$266,284,000. Gross profit margin increased to 18% which was mainly attributable to the increase in gross profit margin of coatings segment and the decline in revenue from the low-gross-profit-margin general trading segment.

. Profit before income tax from core shipping services business increased by 26% to HK$136,598,000.

. Basic and diluted earnings per share was 8.59 HK cents (2019: 9.79 HK cents), decreased by 12%.

. The Board has declared an interim dividend of 6.5 HK cents (2019: 7 HK cents) per share.

. The Group had net cash (represented total restricted bank deposits and current deposits and cash and cash equivalents, less short-term borrowings) of HK$6,113,351,000 as at 30th June 2020.

The board of directors (the ''Board'' or the ''Director(s)'') of COSCO SHIPPING International (Hong Kong) Co., Ltd. (the ''Company'' or ''COSCO SHIPPING International'') is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively, the ''Group'') for the six months ended 30th June 2020. The unaudited condensed consolidated results have been reviewed by the audit committee of the Company (the ''Audit Committee'').

- 1 -

The Group's unaudited condensed consolidated income statement, unaudited condensed consolidated statement of comprehensive income, unaudited condensed consolidated statement of financial position and explanatory notes 1 to 12 as presented below are extracted from the Group's unaudited condensed consolidated interim financial information for the six months ended 30th June 2020 (the ''Unaudited Condensed Consolidated Interim Financial Information''), which has been reviewed by the Company's independent auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review Engagements 2410 ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'' issued by the Hong Kong Institute of Certified Public Accountants (the ''HKICPA'').

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30th June 2020

		Unaudited
		Six months ended 30th June
		2020			2019
	Note	HK$'000	HK$'000
Revenue	3	1,482,759			1,625,976
Cost of sales		(1,216,475)		(1,351,812)
Gross profit		266,284			274,164
Management fee income		36,106			35,334
Other income and (losses) - net	4	(22,069)		(8,500)
Selling, administrative and general expenses		(242,752)		(241,056)
Operating profit	5	37,569			59,942
Finance income	6	75,348			107,372
Finance costs	6	(1,895)		(1,599)
Finance income - net	6	73,453			105,773
Share of profits of joint ventures		35,295			22,751
Share of profits/(losses) of associates		10,436			(5,959)
Profit before income tax		156,753			182,507
Income tax expenses	7	(22,201)		(31,893)
Profit for the period		134,552			150,614
Profit attributable to:
Equity holders of the Company		131,625			150,025
Non-controlling interests		2,927			589
		134,552			150,614
Earnings per share attributable to equity holders of
the Company during the period
- basic and diluted, HK cents	8	8.59			9.79

- 2 -

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30th June 2020

														Unaudited
	Six months ended 30th June
	2020								2019
									HK$'000	HK$'000
Profit for the period	134,552								150,614
Other comprehensive (losses)/income
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	(32,750)							(5,153)
Share of currency translation differences of joint ventures	(4,314)							(137)
Share of currency translation differences of associates	(14)							(15)
Items that will not be reclassified to profit or loss:
Fair value (losses)/gains on financial assets at fair value through
other comprehensive income, net	(21,123)							457
Gain on revaluation upon reclassification of property, plant and
equipment and right-of-use assets to investment properties	5,518								7,428
Other comprehensive (losses)/income for the period
	(52,683)							2,580
Total comprehensive income for the period	81,869								153,194
Total comprehensive income/(losses) attributable to:
Equity holders of the Company	84,655								153,726
Non-controlling interests	(2,786)							(532)
	81,869								153,194

- 3 -

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30th June 2020

														Unaudited																			Audited
															30th June							31st December
		2020	2019
	Note																HK$'000																	HK$'000
ASSETS
Non-current assets		104,633
Intangible assets		105,617
Property, plant and equipment		269,721	281,550
Right-of-use assets		38,810	39,577
Investment properties		127,015	121,261
Investments in joint ventures		464,985	437,419
Investments in associates		157,328	147,693
Financial assets at fair value through other comprehensive income		55,428	76,551
Deferred income tax assets		40,135		43,004
								1,258,055	1,252,672
Current assets
							346,056
Inventories		305,997
Trade and other receivables	10	1,839,702	1,494,814
Current income tax recoverable		4,925	3,722
Restricted bank deposits		5,474	5,582
Current deposits and cash and cash equivalents		6,189,984		6,314,159
		8,386,141		8,124,274
Total assets		9,644,196	9,376,946
EQUITY
Capital and reserves attributable to the Company's equity holders		153,296
Share capital		153,296
Reserves		7,712,133		7,773,109
		7,865,429	7,926,405
Non-controlling interests		289,028		291,814
Total equity		8,154,457	8,218,219
LIABILITIES
Non-current liabilities		1,130
Lease liabilities	11	1,934
Deferred income tax liabilities		67,921		67,743
																						69,051																			69,677
Current liabilities		925,845
Trade and other payables	11	645,594
Contract liabilities	11	386,723	361,896
Current income tax liabilities		20,435	13,778
Short-term borrowings		82,107	61,399
Lease liabilities	11	5,578		6,383
		1,420,688		1,089,050
Total liabilities								1,489,739	1,158,727
Total equity and liabilities		9,644,196	9,376,946

- 4 -

NOTES:

1. GENERAL INFORMATION
   The Group is principally engaged in the provision of shipping services and general trading.
   The Company is a limited liability company incorporated in Bermuda and its shares are listed on The Stock Exchange of Hong Kong Limited (the ''Stock Exchange''). The address of its principal place of business is 47th Floor, COSCO Tower, 183 Queen's Road Central, Hong Kong.
   The ultimate holding company of the Company is 中國遠洋海運集團有限公司 (China COSCO Shipping Corporation Limited*) (''COSCO SHIPPING''), a state-owned enterprise established in the People's Republic of China (the ''PRC'').
   The Unaudited Condensed Consolidated Interim Financial Information is presented in Hong Kong dollars, unless otherwise stated.
   The Unaudited Condensed Consolidated Interim Financial Information was approved by the Board for issue on 20th August 2020.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
   The Unaudited Condensed Consolidated Interim Financial Information has been prepared in accordance with Hong Kong Accounting Standard 34 ''Interim Financial Reporting'' issued by the HKICPA and the disclosure requirements of the Rules Governing the Listing of Securities on the Stock Exchange (the ''Listing Rules'').
   The Unaudited Condensed Consolidated Interim Financial Information should be read in conjunction with the annual financial statements for the year ended 31st December 2019, which were prepared in accordance with Hong Kong Financial Reporting Standards (''HKFRSs'') issued by the HKICPA.
   The accounting policies and methods used in the preparation of the Unaudited Condensed Consolidated Interim Financial Information are consistent with those set out in the annual financial statements for the year ended 31st December 2019 except that the Group has adopted the following amendments to existing standards issued by the HKICPA, which are relevant to its operations and are effective for accounting periods beginning on or after 1st January 2020.

		Effective for
		accounting periods
		beginning on or after
Conceptual Framework for	Revised Conceptual Framework for Financial	1st January 2020
Financial Reporting 2018	Reporting
Amendments to HKAS 1 and	Definition of Material	1st January 2020
HKAS 8
Amendments to HKFRS 3	Definition of a Business	1st January 2020

- 5 -

The adoption of the above amendments to existing standards did not result in any substantial changes to the Group's accounting policies and had no material financial impact on the Unaudited Condensed Consolidated Interim Financial Information.

The following amendments to existing standards have been published by the HKICPA and are relevant to the Group's operations. They are not yet effective for accounting periods beginning on 1st January 2020 and have not been early adopted by the Group.

		Effective for
		accounting periods
		beginning on or after
Amendments to HKFRS 10	Sale or Contribution of Assets between an	To be determined
and HKAS 28	Investor and its Associate or Joint Venture

The Group has already commenced an assessment of the related impact of adopting the above amendments to existing standards, but it is not yet in a position to state whether it will have a significant impact on its result of operations and financial position.

3 REVENUE AND SEGMENT INFORMATION

Turnover, representing revenue, recognised during the period is as follows:

	Six months ended 30th June
	2020	2019
	HK$'000		HK$'000
Sale of coatings	404,067	507,564
Sale of marine equipment and spare parts	714,393	640,083
Commission income from ship trading agency	32,072	49,447
Commission income from insurance brokerage	42,946	35,554
Sale of marine fuel and other products	56,737	23,427
Sale of asphalt and other products	232,544		369,901
	1,482,759	1,625,976

- 6 -

The chief operating decision-maker has been identified as the executive directors. The executive directors review the Group's internal reports in order to make decisions about resources to be allocated to the segment and assess its performance. Management considers the business from a product perspective and has identified the following reportable segments on the basis of these reports:

Reportable segments	Business activities
Coatings	production and sale of coatings, and holding of investments in joint ventures,
	namely Jotun COSCO Marine Coatings (HK) Limited (''Jotun COSCO'') and
	常熟耐素生物材料科技有限公司 (Nasurfar Biomaterial Technology
	(Changshu) Co., Ltd.*) (''Nasurfar Changshu'')
Marine equipment and spare parts	trading of marine equipment and spare parts, and holding of investments in
	joint ventures
Ship trading agency	provision of agency services relating to shipbuilding, ship trading and bareboat
	charter business, and holding of investments in a joint venture and an
	associate
Insurance brokerage	provision of insurance brokerage services
Marine fuel and other products	trading of marine fuel and other related products, and holding of investment in
	an associate, Double Rich Limited (''Double Rich'')
General trading	trading of asphalt and other products, and holding of investments in associates

Others mainly comprise the Group's financial assets at fair value through other comprehensive income (''FVOCI'').

Management assesses the performance of the operating segments based on a measure of profit before income tax.

- 7 -

																	Inter-
													General			segment
					Shipping services					trading	Others	elimination	Total
			Marine
			equipment	Ship			Marine fuel
			and spare	trading	Insurance	and other
	Coatings	parts	agency	brokerage	products	Total
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
							Six months ended and as at 30th June 2020
Profit or loss items:
Segment revenue	404,067		714,393		32,072		43,412		56,737		1,250,681		232,544		-	(466)	1,482,759
Inter-segment revenue	-		-	-	(466)	-	(466)	-	-	466		-
Revenue from external customers	404,067		714,393		32,072		42,946		56,737		1,250,215		232,544		-	-	1,482,759
Timing of revenue recognition:
At a point in time	404,067		714,393		-	-	56,737		1,175,197		232,544		-	-	1,407,741
Over time	-		-	32,072		42,946		-	75,018		-	-	-	75,018
	404,067		714,393		32,072		42,946		56,737		1,250,215		232,544		-	-	1,482,759
Segment operating profit/(loss)	2,235		41,036		19,206		29,986		(1,462)	91,001		2,115		2,754		-	95,870
Finance income	80		532		1,090		369		101		2,172		94		-	(194)	2,072
Finance costs	(83)	(585)	(8)	(50)	(2)	(728)	(1,351)	-	194		(1,885)
Share of profits of joint ventures	34,179		868		248		-	-	35,295		-	-	-	35,295
Share of profits of associates	-		-	36		-	8,822		8,858		1,578		-	-	10,436
Segment profit before income tax	36,411		41,851		20,572		30,305		7,459		136,598		2,436		2,754		-		141,788
Income tax expenses	(1,822)	(9,324)	(5,123)	(5,596)	-	(21,865)	(200)	-	-	(22,065)
Segment profit after income tax	34,589		32,527		15,449		24,709		7,459		114,733		2,236		2,754		-		119,723
Assets and liabilities items:
Total segment assets	1,366,342		1,329,862		256,889		596,466		194,797		3,744,356		706,379		53,278		(174,969)	4,329,044
Total segment assets include:
- Joint ventures	451,372		10,159		3,454		-	-	464,985		-	-	-	464,985
- Associates	-	-	2,124		-	146,245		148,369		8,959		-	-	157,328
Total segment liabilities	225,852		612,517		50,273		438,308		206		1,327,156		221,855		-	(174,969)	1,374,042
Other items:
Depreciation and amortisation, net of
amount capitalised	9,110		3,448		53		104		-	12,715		2,375		-	-	15,090
Reversal of provision for impairment
of inventories, net	(343)	-	-	-	-	(343)	-	-	-	(343)
Provision for impairment of trade
receivables, net	2,818		-	-	-	-	2,818		-	-	-	2,818
Additions to non-current assets (other
than financial assets at FVOCI and
deferred income tax assets)	362		148		-	31		-	541		108		-	-	649
							Year ended and as at 31st December 2019
Assets and liabilities items:
Total segment assets	1,369,790		1,268,441		249,308		294,956		188,549		3,371,044		657,157		74,121		(174,646)	3,927,676
Total segment assets include:
- Joint ventures	424,665	9,482	3,272	-	-	437,419		-	-	-	437,419
- Associates	-	-	2,129		-	138,024		140,153		7,540		-	-	147,693
Total segment liabilities	242,697		583,640		55,847		157,988		579		1,040,751		165,341		-	(174,646)	1,031,446
Other items:
Additions to non-current assets (other
than financial assets at FVOCI and
deferred income tax assets)	11,758		3,071		-	287		-	15,116		3,995		-	-	19,111

- 8 -

																	Inter-
													General			segment
					Shipping services					trading	Others	elimination	Total
			Marine
			equipment	Ship			Marine fuel
			and spare	trading	Insurance	and other
	Coatings	parts	agency	brokerage	products	Total
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
							Six months ended and as at 30th June 2019
Profit or loss items:
Segment revenue	507,564		640,353	49,447	36,124	23,427	1,256,915	373,307	-	(4,246)	1,625,976
Inter-segment revenue	-		(270)	-	(570)	-	(840)	(3,406)	-	4,246		-
Revenue from external customers	507,564	640,083	49,447	35,554	23,427	1,256,075	369,901	-	-	1,625,976
Timing of revenue recognition:
At a point in time	507,564		640,083		-	-	23,427		1,171,074		369,901		-	-	1,540,975
Over time	-		-	49,447		35,554		-	85,001		-	-	-	85,001
	507,564		640,083		49,447		35,554		23,427		1,256,075		369,901		-	-	1,625,976
Segment operating profit/(loss)	3,358		35,876	30,966	21,822	(1,616)	90,406	8,232	2,590	-	101,228
Finance income	625		282	955	1,399		31		3,292		642		-	(220)	3,714
Finance costs	(96)	(633)	(16)	(62)	(584)	(1,391)	(2,806)	-	220		(3,977)
Share of profits of joint ventures	21,946		589		216		-	-	22,751		-	-	-	22,751
Share of profits/(losses) of associates	-		-	43		-	(6,870)	(6,827)	868		-	-	(5,959)
Segment profit/(loss) before income tax	25,833		36,114	32,164	23,159	(9,039)	108,231	6,936	2,590	-	117,757
Income tax expenses	(9,516)	(6,746)	(9,358)	(4,319)	-	(29,939)	(1,556)	-	-	(31,495)
Segment profit/(loss) after income tax	16,317		29,368	22,806	18,840	(9,039)	78,292	5,380	2,590	-	86,262
Assets and liabilities items:
Total segment assets	1,396,081		1,186,509		248,523		338,716		145,333		3,315,162		549,124		75,599		(183,630)	3,756,255
Total segment assets include:
- Joint ventures	404,014		10,901		2,852		-	-	417,767		-	-	-	417,767
- Associates	-	-	2,198		-	80,532		82,730		7,774		-	-	90,504
Total segment liabilities	273,578		525,387	68,352	196,256	12,257	1,075,830	309,149	-	(183,630)	1,201,349
Other items:
Depreciation and amortisation, net of
amount capitalised	9,501		3,639		109		114		-	13,363		1,236		-	-	14,599
Reversal of provision for impairment
of trade receivables, net	(788)	-	-	-	-	(788)	-	-	-	(788)
Additions to non-current assets (other
than financial assets at FVOCI and
deferred income tax assets)	3,539		901		-	-	-	4,440		3,101		-	-	7,541
							Year ended and as at 31st December 2018
Assets and liabilities items:
Total segment assets	1,375,325		1,174,468		190,335		259,157		240,923		3,240,208		630,994		75,263		(245,482)	3,700,983
Total segment assets include:
- Joint ventures	383,696		10,362		2,651		-	-	396,709		-	-	-	396,709
- Associates	-	-	2,164		-	87,540		89,704		6,947		-	-	96,651
Total segment liabilities	264,840		552,058	60,398	124,657	95,078	1,097,031	395,385	-	(245,482)	1,246,934
Other items:
Additions to non-current assets (other
than financial assets at FVOCI and
deferred income tax assets)	11,214		455		35		210		-	11,914		131		-	-	12,045

- 9 -

A reconciliation of the total of the reportable segments' profit before income tax to the Group's profit after income tax is as follows:

	Six months ended 30th June
	2020		2019
	HK$'000	HK$'000
Profit before income tax for reportable segments	139,034		115,167
Profit before income tax for others	2,754		2,590
Profit before income tax for all segments	141,788		117,757
Elimination of segment income from corporate headquarters	(331)	(442)
Elimination of segment finance costs to corporate headquarters	-	2,392
Corporate finance income	73,276		103,658
Corporate finance costs	(10)	(14)
Corporate net exchange losses	(25,979)	(14,013)
Corporate expenses, net of income	(31,991)	(26,831)
Profit before income tax for the Group	156,753		182,507
Income tax expenses for all segments	(22,065)	(31,495)
Corporate income tax expenses	(136)	(398)
Profit after income tax for the Group	134,552		150,614

A reconciliation of the total of the reportable segments' assets to the Group's total assets is as follows:

	30th June	31st December	30th June
	2020		2019		2019
	HK$'000	HK$'000	HK$'000
Total assets for reportable segments	4,450,735		4,028,201		3,864,286
Total assets for others	53,278		74,121		75,599
Elimination of inter-segment receivables	(174,969)	(174,646)	(183,630)
	4,329,044		3,927,676		3,756,255
Corporate assets (mainly deposits and cash and cash
equivalents)	5,471,116		5,603,750		5,872,934
Elimination of corporate headquarters' receivables from
segments	(155,964)	(154,480)	(345,072)
Total assets for the Group	9,644,196		9,376,946		9,284,117

- 10 -

A reconciliation of the total of the reportable segments' liabilities to the Group's total liabilities is as follows:

		30th June				31st December												30th June
		2020		2019		2019
		HK$'000												HK$'000												HK$'000
	Total liabilities for reportable segments	1,549,011		1,206,092		1,384,979
	Elimination of inter-segment payables	(174,969)	(174,646)	(183,630)
		1,374,042		1,031,446		1,201,349
	Corporate liabilities	271,661		281,761		263,064
	Elimination of segment payables to corporate headquarters	(155,964)	(154,480)	(345,072)
	Total liabilities for the Group	1,489,739		1,158,727		1,119,341
4	OTHER INCOME AND (LOSSES) - NET
								Six months ended 30th June
				2020		2019
															HK$'000												HK$'000
	Other income/(expenses) - net
	- Rental income			1,677		1,525
	- Direct operating expenses for generating rental income			(14)	(19)
	- Dividend income from listed investments			2,754		2,590
				4,417		4,096
	Other gains/(losses) - net
	- Net gains on disposal of property, plant and equipment			3		67
	- (Provision)/reversal of provision for impairment of
	trade receivables, net (note 10(b))			(2,818)	788
	- Reversal of provision for impairment of inventories, net			343																				-
	- Government subsidy income			1,308		137
	- Net exchange losses			(28,035)	(14,091)
	- Others			2,713		503
				(26,486)	(12,596)
				(22,069)	(8,500)

- 11 -

5 OPERATING PROFIT

Operating profit is stated after charging the following:

			Six months ended 30th June
		2020		2019
				HK$'000			HK$'000
	Employee benefit expenses, including directors' emoluments
	and provident funds	170,377		167,992
	Expenses related to short-term leases	15,581		12,112
	Depreciation and amortisation, net of amount capitalised
	in inventories totalling HK$2,063,000 (2019: HK$2,049,000)	16,044		15,035
6	FINANCE INCOME - NET
			Six months ended 30th June
		2020		2019
				HK$'000			HK$'000
	Interest income from:
	- a fellow subsidiary				-	2,247
	- a joint venture				-	47
	- bank deposits	75,348		105,078
	Total finance income	75,348		107,372
	Interest expenses on:
	- loans from a fellow subsidiary	(831)	(617)
	- lease liabilities	(187)	(257)
	- a bank loan				-	(123)
	Other finance charges	(877)	(602)
	Total finance costs
	(1,895)	(1,599)
	Finance income - net	73,453		105,773

7 INCOME TAX EXPENSES

Hong Kong profits tax has been provided at the rate of 16.5% (2019: 16.5%) on the estimated assessable profit for the period.

The PRC income tax has been calculated on the estimated assessable profit derived from the Group's operations in the PRC for the period at 25% (2019: 25%) except for a subsidiary, which was taxed at a reduced rate of 15% (2019: 15%) based on different local preferential policies on income tax and approval by relevant tax authorities.

Other overseas taxation has been calculated on the estimated assessable profit for the period at the rates of taxation prevailing in the countries in which the Group operates. These rates range from 17% to 35% (2019: 17% to 43%) during the period.

- 12 -

Deferred income tax is calculated in full on temporary differences under the liability method using tax rates substantively enacted by the reporting date.

The amount of income tax charged for the period to the condensed consolidated income statement is as follows:

	Six months ended 30th June
	2020	2019
	HK$'000	HK$'000
Current income tax
- current period
- Hong Kong profits tax	7,894	7,465
- PRC enterprise income tax	6,103	13,297
- other overseas taxation	4,432	1,725

• under-provision/(over-provision)in prior years

- other overseas taxation	141		-
- PRC enterprise income tax	-	(328)
Deferred income tax charge, net	3,631		9,734
Income tax expenses	22,201	31,893

1. EARNINGS PER SHARE
   The calculation of basic and diluted earnings per share is based on the profit attributable to equity holders of the Company of HK$131,625,000 (2019: HK$150,025,000) and the number of shares in issue during the period of 1,532,955,429 shares (2019: 1,532,955,429 shares).
   There was no potential dilutive ordinary share in existence during both periods.
2. DIVIDEND

Six months ended 30th June

20202019

HK$'000 HK$'000

Interim dividend, declared, of HK$0.065
(2019: HK$0.07) per ordinary share	99,642	107,307

At the board meeting held on 20th August 2020, the directors of the Company declared an interim dividend of HK$0.065 per ordinary share for the six months ended 30th June 2020. This dividend has not been recognised as a liability in the Unaudited Condensed Consolidated Interim Financial Information, but will be recognised in shareholders' equity in the year ending 31st December 2020.

1. final dividend of HK$145,631,000 relating to the year ended 31st December 2019 (2018: HK$137,966,000) was paid in June 2020.

- 13 -

10 TRADE AND OTHER RECEIVABLES
	30th June	31st December
	2020		2019
	HK$'000	HK$'000
Trade receivables	905,140		702,489
Less: provision for impairment (note (b))	(15,472)	(12,863)
Trade receivables, net (note (a))	889,668		689,626
Bills receivable, prepayments, deposits, other receivables and amounts
due from related parties, net of provision for impairment	950,034		805,188
	1,839,702		1,494,814
Notes:

1. The ageing analysis of trade receivables (including amounts due from related parties which are trading in nature) based on invoice date and after provision for impairment is as follows:

	30th June		31st December
	2020	2019
	HK$'000		HK$'000
Current - 90 days	630,098	397,894
91-180 days	141,828	148,786
Over 180 days	117,742		142,946
	889,668	689,626

For sale of coatings, marine equipment and spare parts, marine fuel, asphalt and other products, the majority of sales are on credit terms from 30 days to 120 days. Other than those with credit terms, all invoices are payable upon presentation.

1. Movements on the provision for impairment of trade receivables are as follows:

	Six months ended 30th June
	2020		2019
	HK$'000	HK$'000
At 1st January	12,863		14,566
Currency translation differences	(209)	(13)
Provision/(reversal of provision) for impairment, net (note 4)	2,818		(788)
At 30th June	15,472		13,765

- 14 -

11 TRADE AND OTHER PAYABLES, CONTRACT LIABILITIES, LEASE LIABILITIES

	30th June		31st December
	2020	2019
	HK$'000		HK$'000
Trade payables (note (a))	595,077	336,949
Bills payable, accrued liabilities, other payables, amounts due to
related parties and dividend payable to non-controlling interests	330,768		308,645
	925,845	645,594
Contract liabilities (note (b))	386,723	361,896
Lease liabilities (note (c))	6,708		8,317
	1,319,276	1,015,807
Notes:

1. The ageing analysis of trade payables (including amounts due to related parties which are trading in nature) based on invoice date is as follows:

	30th June		31st December
	2020	2019
	HK$'000		HK$'000
Current - 90 days	533,215	310,649
91-180 days	34,642	25,493
Over 180 days	27,220		807
	595,077	336,949

1. Revenue recognised in the current reporting period related to brought-forward contract liabilities:

Six months ended 30th June

20202019

HK$'000 HK$'000

Revenue recognised that was included in the contract liabilities
balance at the beginning of the period	244,037	244,499

- 15 -

1. Maturity analysis of lease liabilities is as below:

	30th June		31st December
	2020	2019
	HK$'000		HK$'000
Within one year	5,578	6,383
In the second to fifth years inclusive	1,130		1,934
	6,708	8,317

12 FINANCIAL GUARANTEE CONTRACTS

As at 30th June 2020, the Group had financial guarantees issued in favour of a bank as security for general banking facilities granted to an associate.

Terms and face values of the liabilities guaranteed are as follows:

		30th June		31st December
		2020	2019
	Year of maturity	HK$'000		HK$'000
General banking facilities of an associate	2021	166,633	167,439

As at 30th June 2020, the credit risk and liquidity risk exposure relating to the above financial guarantee contract are considered as low.

The fair value of the guarantee contract is not material and has not been recognised in the Unaudited Condensed Consolidated Interim Financial Information.

- 16 -

FINANCIAL REVIEW

During the first half of 2020, the Group recorded a year-on-year decline in performance, mainly attributable to the decrease in interest income and the impact on certain business segments by the novel coronavirus pneumonia (''COVID-19'') epidemic. During the period, profit attributable to equity holders of the Company was HK$131,625,000 (2019: HK$150,025,000), representing a decrease of 12% as compared to the same period of 2019. The basic and diluted earnings per share was 8.59 HK cents (2019: 9.79 HK cents), representing a decrease of 12% as compared to the same period of 2019.

Revenue

For the six months ended 30th June 2020, the Group's revenue decreased by 9% to HK$1,482,759,000 (2019: HK$1,625,976,000) as compared to the same period of 2019. Revenue from the core shipping services business decreased slightly to HK$1,250,215,000 (2019: HK$1,256,075,000) and accounted for 84% (2019: 77%) of the Group's revenue. The wide spread of COVID-19 had caused suspension of production of certain plants in the PRC, resulting in the decrease of revenues from coatings and ship trading agency segments. Revenue from general trading segment decreased by 37% to HK$232,544,000 (2019: HK$369,901,000) and accounted for 16% (2019: 23%) of the Group's revenue.

Gross Profit and Gross Profit Margin

The Group's gross profit for the period was HK$266,284,000 (2019: HK$274,164,000), decreasing by 3% as compared to the same period of 2019. The decrease in gross profit was mainly attributable to the decrease in revenue from ship trading agency segment. During the period, gross profit margin was 18.0% (2019: 16.9%), increased by 1.1 percentage point as compared to the same period of last year. The overall increase in gross profit margin was mainly attributable to the increase in gross profit margin of coatings segment and the decline in revenue from the low-gross-profit-margin general trading segment.

Management Fee Income

During the period, there was a management fee income of HK$36,106,000 (2019: HK$35,334,000) arising from the provision of management services by the Company in relation to the day-to-day business operations and management of COSCO SHIPPING (Hong Kong) Co., Limited and its subsidiaries (other than those relating to the Group and Piraeus Port Authority S.A.).

Other Income and (Losses) - Net

During the period, other income and (losses) - net loss of HK$22,069,000 (2019: HK$8,500,000)

mainly included net exchange losses of HK$28,035,000 (2019: HK$14,091,000).

- 17 -

Selling, Administrative and General Expenses

During the period, selling, administrative and general expenses increased by 1% to HK$242,752,000 (2019: HK$241,056,000), which was mainly due to increase in selling expenses as compared to the same period of 2019.

Finance Income

Finance income, which primarily represented interest income on the Group's bank deposits, decreased by 30% to HK$75,348,000 (2019: HK$107,372,000) as a result of the decrease in interest rate of cash deposit as compared to the same period of 2019.

Finance Costs

Finance costs, which mainly represented interest expenses on short-term borrowings and other financial charges, increased by 19% to HK$1,895,000 (2019: HK$1,599,000).

Share of Profits of Joint Ventures

The Group's share of profits of joint ventures was HK$35,295,000 (2019: HK$22,751,000). This item

primarily represented the share of profits of Jotun COSCO of HK$32,576,000 (2019: HK$19,209,000)

and Nasurfar Changshu of HK$1,603,000 (2019: HK$2,737,000) which were included in the coatings segment.

Share of Profits/(Losses) of Associates

The Group's share of profits of associates was HK$10,436,000 (2019: share of losses of HK$5,959,000). This item primarily represented the share of profit of Double Rich of HK$8,822,000 (2019: share of loss of HK$6,870,000) which was included in the marine fuel and other products segment.

Profit Attributable to Equity Holders

Profit attributable to equity holders of the Company during the period decreased by 12% to HK$131,625,000 (2019: HK$150,025,000).

- 18 -

FINANCIAL RESOURCES AND LIQUIDITY

As at 30th June 2020, capital and reserves attributable to the Company's equity holders decreased by 0.8% to HK$7,865,429,000 (as at 31st December 2019: HK$7,926,405,000). As at 30th June 2020, total cash and deposits (including restricted bank deposits of HK$5,474,000) of the Group was HK$6,195,458,000 (as at 31st December 2019: HK$6,319,741,000, including restricted bank deposits of HK$5,582,000). During the period, the Group had net drawdown of short-term borrowings in the amount of HK$22,089,000 (2019: HK$17,334,000). As at 30th June 2020, total banking facilities available to the Group amounted to HK$479,669,000 (as at 31st December 2019: HK$453,958,000), of which HK$84,413,000 (as at 31st December 2019: HK$44,293,000) had been utilised. The gearing ratio, which represented total borrowings over total assets, was 0.9% (as at 31st December 2019: 0.7%). As at 30th June 2020, the Group had net cash (represented total cash and deposits net of short- term borrowings) of HK$6,113,351,000 (as at 31st December 2019: HK$6,258,342,000). To enhance the Group's finance income and to ensure availability of cash at appropriate times to meet the Group's commitments and needs, the Group, on the basis of balancing risk, return and liquidity, invested in a mixture of stable and conservative financial products, including overnight deposits, term deposits and offshore fixed deposits. Return of 2.41% on the Group's cash was achieved during the period, representing 211 basis points above 3-month US Dollar London Interbank Offered Rate as at the end of June 2020. As at 30th June 2020, borrowings of the Group were unsecured debt denominated in Renminbi which carried interest rates calculated with reference to the base rates announced by the People's Bank of China and repayable within one year. The Group had no financial instruments for interest rate hedging purposes.

FINANCIAL RISK MANAGEMENT

The Group principally operates in Hong Kong, the PRC and overseas, and is exposed to foreign exchange risk arising from foreign currencies held, mainly US dollars and Renminbi. Foreign exchange risk arises from commercial transactions and recognised assets and liabilities. The Group manages its foreign exchange exposure by regularly reviewing the foreign currency exposure of its operating subsidiaries and will consider hedging exposure by foreign exchange forward contracts when the need arises. The marine fuel business is subject to fluctuation in oil prices. The Group exercises stringent control over the use of derivative financial instrument when necessary, for hedging against the price risks of marine fuel and other products. In addition, the conversion of Renminbi into foreign currencies in the PRC is subject to the rules and regulations of foreign exchange controls promulgated by the government of the PRC.

EMPLOYEE

As at 30th June 2020, excluding joint ventures and associates, the Group had 883 (as at 31st December 2019: 901) employees, of which 170 (as at 31st December 2019: 168) were Hong Kong employees. During the period, total employee benefit expenses, including directors' emoluments and provident funds, were HK$170,377,000 (2019: HK$167,992,000). Employees were remunerated on the basis of their performance and experience. Remuneration packages include salary and a year-end discretionary

- 19 -

bonus, which are determined with reference to market conditions and individual performance. During the period, all of the Hong Kong employees have participated in the Mandatory Provident Fund Scheme or recognised occupational retirement scheme.

The share option incentive scheme of the Company has been adopted by the shareholders of the Company (the ''Shareholders'') at the special general meeting on 9th April 2020 (the ''Share Option Incentive Scheme''). The Company granted an aggregate of 23,830,000 share options to certain Directors and employees of the Group to subscribe for a total of 23,830,000 shares of the Company (the ''Share(s)'') at a price of HK$2.26 per Share on 28th April 2020 (the ''Date of Grant'') under the Share Option Incentive Scheme. Subject to the fulfilment of the relevant conditions, these share options are exercisable from 28th April 2022 to 27th April 2026 in batches and each batch of such share options is exercisable within the periods stated as following: (a) 33.3% of the share options will be exercisable commencing on the first trading day after the expiration of the 24-month period (the second anniversary) from the Date of Grant and ending on the last trading day of the 36-month period from the Date of Grant; (b) 33.3% of share options will be exercisable commencing on the first trading day after the expiration of the 36-month period (the third anniversary) from the Date of Grant and ending on the last trading day of the 48-month period from the Date of Grant; and (c) 33.4% of the share options will be exercisable commencing on the first trading day after the expiration of the 48-month period (the fourth anniversary) from the Date of Grant and ending on the last trading day of the 72-month period from the Date of Grant.

INTERIM DIVIDEND

The Board has declared an interim dividend of 6.5 HK cents (2019: 7 HK cents) per share for the six months ended 30th June 2020 which will be payable on 28th September 2020 to the Shareholders whose names appear on the register of members of the Company (the ''Register of Members'') on 18th September 2020.

For the purpose of ascertaining the Shareholders' entitlement to the interim dividend, the Register of Members will be closed from 16th September 2020 to 18th September 2020, both days inclusive, during which no transfer of Shares will be registered. In order to qualify for the interim dividend for the six months ended 30th June 2020, all transfer documents accompanied by the relevant share certificate(s) must be lodged with the Company's branch share registrar and transfer office in Hong Kong, Tricor Abacus Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration not later than 4:30 p.m. on 15th September 2020.

REVIEW OF BUSINESS OPERATIONS

In the first half of 2020, the global economy was gravely impacted by the outbreak of COVID-19. The entire production chain of the economy, from raw materials, production, logistics and transportation to sales and services had been subjected to disruptions or even suspension of operation to varying degrees. Market expected the global economy to record a double-digityear-on-year contraction in the first half of the year. Fortunately, China recovered quickly from the epidemic as Gross Domestic

- 20 -

Product grew by 3.2% year-on-year and 11.5% quarter-on-quarter in the second quarter, indicating clear signs of recovery and demonstrating the exceptionally strong resilience of China's economy, which served as the best support for the Group to remain robust in adversity.

In view of the severe market conditions amid the COVID-19, the Group had been responding promptly. In response to the changes in the epidemic, we had taken comprehensive measures to ensure the safety of personnel and hygiene of the working environment, striving the best in anti-epidemic works.

In the first half of the year, the Group's overall profit before income tax dropped by 14% as compared to the same period of last year, which was less severe than expected. In particular, the marine coatings business continued to recover with further strengthened profitability and stability. Double Rich, an associate of the Company, recorded year-on-year profit increment, spurring the marine fuel business to grow.

1. Core Business - Shipping Services

The Group's shipping services mainly include ship trading agency services, insurance brokerage services, supply of marine equipment and spare parts, production and sale of coatings, and trading and supply of marine fuel and related products. During the period, revenue from the Group's shipping services was HK$1,250,215,000 (2019: HK$1,256,075,000), representing a slight decrease as compared to the same period of 2019. Profit before income tax from shipping services was HK$136,598,000 (2019: HK$108,231,000), representing an increase of 26% as compared to the same period of 2019.

1.1 Ship Trading Agency Services

During the period, revenue from the ship trading agency segment of the Group decreased by 35% to HK$32,072,000 (2019: HK$49,447,000) as compared to the same period of last year. Segment profit before income tax was HK$20,572,000 (2019: HK$32,164,000), representing a decrease of 36% as compared to the same period of last year. The weak performance in ship trading agency business was mainly attributable to the delayed shipbuilding schedules of the major shipbuilders under the impact of COVID-19 epidemic, resulting in a decrease in commission income from new build vessels. Even though the number of new build vessels delivered recorded year-on-year growth in the first half of the year, the majority of them were small size vessels, which caused a decrease in commission income. During the period, the Group's aggregate number of new build vessels delivery was 20 (2019: 8), aggregating 836,900 dead weight tonnages (2019: 1,333,000 dead weight tonnages). A total number of 12 (2019: 11) new build vessels have been ordered through the Group, aggregating 623,600 dead weight tonnages (2019: 1,558,000 dead weight tonnages). In addition, the sale and purchase of a total of 16 (2019: 11) second-hand vessels through the Group were recorded, aggregating 211,700 dead weight tonnages (2019: 196,000 dead weight tonnages).

- 21 -

1. Insurance Brokerage Services
   During the period, revenue from insurance brokerage segment of the Group was HK$42,946,000 (2019: HK$35,554,000), representing an increase of 21% as compared to the same period of last year. Segment profit before income tax was HK$30,305,000 (2019: HK$23,159,000), representing an increase of 31% as compared to the same period of last year, which was attributed to the increase in premium rate of war insurance since the end of last year.
2. Supply of Marine Equipment and Spare Parts
   During the period, revenue from marine equipment and spare parts segment of the Group was HK$714,393,000 (2019: HK$640,083,000), representing an increase of 12% as compared to the same period of last year, which was mainly attributable to increases in the number of and share of business volume from customers within COSCO SHIPPING Group as compared to the same period of last year. Segment profit before income tax increased by 16% to HK$41,851,000 (2019: HK$36,114,000) as compared to the same period of last year.
3. Production and Sale of Coatings
   During the period, revenue from coatings segment of the Group was HK$404,067,000 (2019: HK$507,564,000), representing a decrease of 20% as compared to the same period of last year. Segment profit before income tax was HK$36,411,000 (2019: HK$25,833,000), representing an increase of 41% as compared to the same period of last year, resulting from the increase in the share of profit from Jotun COSCO as compared to the same period of last year.
   For container coatings, the sales volume decreased by 17% to 9,643 tonnes (2019: 11,684 tonnes) as compared to the same period of last year.
   For heavy-dutyanti-corrosion coatings, the sales volume of industrial heavy-duty anti- corrosion coatings together with workshop primer amounted to 8,171 tonnes (2019: 9,426 tonnes), representing a decrease of 13% as compared to the same period of last year.
   For marine coatings, during the period, the Group's share of profit from Jotun COSCO was HK$32,576,000 (2019: HK$19,209,000). The sales volume of Jotun COSCO's coatings for new build vessels amounted to 21,094,000 litres (2019: 22,122,000 litres), representing a decrease of 5% as compared to the same period of last year. Sales volume of coatings for repair and maintenance was 13,616,000 litres (2019: 11,631,000 litres), representing an increase of 17% as compared to the same period of last year. The sales volume of Jotun COSCO's marine coatings was 34,710,000 litres (equivalent to approximately 46,859 tonnes) (2019: 33,753,000 litres (equivalent to approximately 45,567 tonnes)), representing an increase of 3% as compared to the same period of last year. As at 30th June 2020, Jotun

- 22 -

COSCO had coating contracts on hand for new build vessels amounting to 21,316,209 dead weight tonnages pending delivery. The coatings were scheduled to be delivered in the coming two years.

During the period, the Group's share of profit from Nasurfar Changshu was HK$1,603,000 (2019: HK$2,737,000).

1.5 Trading and Supply of Marine Fuel and Related Products

During the period, revenue from marine fuel and other products segment of the Group was HK$56,737,000 (2019: HK$23,427,000), and total sales volume of marine fuel products was 19,285 tonnes (2019: 6,277 tonnes), representing an increase of 207% as compared to the same period of last year. However, in view of the liquidation filed by Coastal Oil Singapore Pte Ltd, a major supplier of Sinfeng Marine Services Pte. Ltd. (''Sinfeng''), at the end of 2018 (''Coastal Oil's Liquidation''), the Group purposely trimmed down Sinfeng's business in order to further prevent and control risks, which resulted in an impact on the business. For details of information in relation to Coastal Oil's Liquidation and the matters arising subsequent to Coastal Oil's Liquidation, please refer to the announcement of the Company dated 4th January 2019. Management is of the view that this event would not have a material impact to the Group's financial information for the period ended 30th June 2020 after taking into account of professional opinion of Sinfeng's legal adviser in respect of the aforesaid matters.

In addition, the Group's share of profit from Double Rich was HK$8,822,000 during the period (2019: share of loss of HK$6,870,000), which was mainly attributable to the higher gross profit resulting from the excess demand of low-sulphur fuel over supply at the beginning of this year and the lower resource costs than the market level with long-term contracts signed with suppliers.

During the period, profit before income tax from marine fuel and other products segment was HK$7,459,000 (2019: loss before income tax of HK$9,039,000).

2. General Trading

During the period, the sales volume of asphalt decreased by 6% to 65,801 tonnes (2019: 69,690 tonnes) as compared to the same period of last year, in addition, due to the decline in asphalt price as compared to the same period of last year, revenue from general trading segment of the Group decreased by 37% to HK$232,544,000 (2019: HK$369,901,000) as compared to the same period of last year. Segment profit before income tax was HK$2,436,000 (2019: HK$6,936,000), representing a decrease of 65% as compared to the same period of last year, mainly due to the drop in both sales volume and settlement price of asphalt.

- 23 -

PROSPECTS

Looking forward to the second half of the year, the COVID-19 epidemic will remain the major uncertainty to the global economy. While the pandemic outside China remains unstable, the recovery of overall economic activities will be slower than previously expected. As a result of the quantitative easing monetary policy by central banks, the recent rebound in financial markets has diverged from fundamental economic outlook, which may escalate market turmoil in the future. According to the projection of International Monetary Fund's World Economic Forecast published in June, the global economy will contract by 4.9% year-on-year in 2020. At the same time, the outlook of the shipping industry remains gloomy by adverse factors including economic slowdown, geopolitical issues and overcapacity.

As China has taken the lead in economic recovery, COSCO SHIPPING International is expected to maintain a stable prospect in its business performance, given our merits in strong operational resilience, business diversification and solid financial foundation. In the second half of the year, we will continue to strengthen the prevention and control measures with respect to COVID-19 in order to ensure the safety of our employees. Meanwhile, we will also optimise our business processes to adapt to the challenging macroeconomic environment with high-quality development.

With the strong support from COSCO SHIPPING Group and an aim of becoming a world class and the leading shipping services company in China, COSCO SHIPPING International will continue to implement the established development strategies, and will adhere to the two strategic directions for development, namely ''unified operational platform for shipping services industrial cluster'' and the ''non-financial business investment platform'', in order to accomplish sustainable business development, maximise enterprise value, and create long-term and stable returns for shareholders.

For the ship trading agency services, the Group will seek continuous improvements in implementing innovative business model and strive for breakthroughs by proactively enriching services scopes, expanding geographical coverage of business, improving service quality and technical content and strengthening market research and the construction of information systems.

For insurance brokerage services, the Group is actively participating in the internal businesses of COSCO SHIPPING Group related to domestic and international port projects and will continue to deeply explore the demand for reinsurance business and non-marine insurance business to broaden its comprehensive business scope.

For the supply of marine equipment and spare parts, the Group will continue to optimise the complement of spare part services, further improve its supplier network and enhance its capacity of one-stop procurement and logistics service, maintaining a high level of customer satisfaction. Looking forward, leveraging its advantages in overseas channels and network coverage, the Group will focus on developing customers of non-COSCO SHIPPING Group, as well as actively explore and expand customer base.

- 24 -

For container coatings, the Group will insist on innovation, continue to optimise the product formula for water-based coatings, accelerate market expansion, strive to gain market share and put efforts in enhancing the profitability and gross profit margin of container coatings through optimisation of processes. For industrial heavy-dutyanti-corrosion coatings, the Group built a research and development system for water-based industrial coatings to support the market development of water- based industrial coatings. It will also continue to explore a well-diversified supplier chain while maintaining a steady gross profit level. For marine coatings, the annual supply for marine coatings in 2020 is estimated to be lower than that in 2019 due to slump of new build vessels delivery in the market. The Group will make efforts to achieve balance between project profitability and market share, allocate resources for new business development, strive to upgrade our products and develop more advanced and eco-friendly marine coatings with improved performance, thus further consolidating our market position.

For the trading and supply of marine fuel and related products, the Group will continue to adhere to robust prudent operating approach, conduct risk prevention and control, and solicit business from new customers cautiously.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities during the six months ended 30th June 2020.

CORPORATE GOVERNANCE

Maintaining high standards of corporate governance has always been one of the Company's priorities. This is achieved through an effective, timely disclosure of information by the Board and a proactive investor relations programme. The Company will continue to implement measures in order to further strengthen its corporate governance and overall risk management.

The Board believed that the Company has complied with the code provisions of Corporate Governance Code contained in Appendix 14 to the Listing Rules (the ''CG Code'') during the six months ended 30th June 2020 except that (a) (i) Mr. Feng Boming, the Non-executive Director, was unable to attend the annual general meeting held on 29th May 2020 due to other business engagement, (ii) Mr. Feng Boming and Mr. Chen Dong, both the Non-Executive Directors, were unable to attend the special general meeting of the Company held on 9th April 2020 (the ''SGM'') due to other business engagement, and (iii) Mr. Alexander Reid Hamilton, the ex-IndependentNon-Executive Director, was unable to attend the SGM due to illness, a deviation from the code provision of A.6.7 of the CG Code which provides that independent non-executive directors and other non-executive directors should attend general meetings; and (b) Mr. Zhu Jianhui, the Managing Director, has been re-designated from the Vice Chairman to the Chairman on 4th March 2020 and the roles of Chairman and Managing Director are taken by the same individual which deviates from code provision A.2.1 of the CG Code. However, the Board believes that the roles of Chairman of the Board and Managing Director taken by the same individual will not impair the balance of power and authority between the Board and the management of the Company, given that: (i) all the Directors are aware of and undertake to fulfill their fiduciary duties as Directors, which require, among others, that he acts for the benefit and in the best interests of the Company; (ii) the balance of power and authority is ensured by the operations of the

- 25 -

Board; and (iii) the overall strategic and other key business, financial and operational policies of the Company are made collectively after thorough discussion at both the Board and senior management levels. The Company will continue to review its corporate governance policies and compliance with the Listing Rules and will continue to adhere to the relevant principles as set out in the CG Code.

Mr. Alexander Reid Hamilton, the Independent Non-executive Director since 9th June 2011, passed away on 21st April 2020. The Board is saddened and grateful for his services and contribution during his tenure of office. To comply with the requirement of the Listing Rules, Mr. Kwong Che Kwong, Gordon was appointed as Independent Non-executive Director on 9th July 2020.

The Audit Committee consists of three Independent Non-executive Directors and the chairman of which is a certified public accountant. The main duties of Audit Committee include reviewing the accounting policies and the Company's financial reporting; monitoring the performance of both the internal and external auditors; reviewing and examining the effectiveness of financial reporting, risk management and internal control systems; ensuring compliance with applicable statutory accounting and reporting requirements. The Audit Committee has discussed the internal controls and financial reporting matters with management of the Company. The Audit Committee and the independent external auditor have reviewed the Unaudited Condensed Consolidated Interim Financial Information of the Group for the six months ended 30th June 2020.

The Company has adopted a code of conduct regarding securities transactions of Directors and employees (the ''Securities Code'') no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the ''Model Code'') contained in Appendix 10 to the Listing Rules. In order to ensure the Directors' dealings in the securities of the Company are conducted in accordance with the Model Code and the Securities Code, a committee was set up to deal with such transactions. The Company has made specific enquiry of all Directors regarding any non-compliance with the Model Code and the Securities Code during the six months ended 30th June 2020, all Directors confirmed that they had complied with the required standards set out in the Model Code and the Securities Code during the period.

By Order of the Board

COSCO SHIPPING International (Hong Kong) Co., Ltd.

Zhu Jianhui

Chairman and Managing Director

20th August 2020

As at the date of this announcement, the Board comprises seven directors with Mr. Zhu Jianhui1 (Chairman and Managing Director), Mr. Ma Jianhua1, Mr. Feng Boming2, Mr. Chen Dong2, Mr. Tsui Yiu Wa, Alec3, Mr. Jiang, Simon X3, and Mr. Kwong Che Keung, Gordon3.

1

2

3

Executive Director

Non-executive Director

Independent Non-executive Director

• for identification purposes only

- 26 -