Stock Code: 600057 Stock Abbreviation: Xiamen Xiangyu
Xiamen Xiangyu Co. Ltd.2024 Annual Report (Summary)
This report is prepared in both Chinese and English. The Chinese version shall prevail in case of any
discrepancy between the Chinese and English texts.To Shareholders
In 2024 as the global economy and trade order underwent accelerated restructuring
international industrial cooperation and competition entered a new stage. Throughout the
year we remained confident in our development path seized emerging opportunities amid
challenges achieved steady progress in our core operations. Our key businesses not only
advanced in scale but also improved in quality driving the Company’s overall recovery and
growth momentum.Amidst market headwinds we pressed ahead with greater resilience and reinforced our
resolve to navigate through economic cycles. First we continued to solidify our
development foundation. We advanced business model upgrades strengthened our risk
management framework optimized our customer portfolio enhanced organizational
capabilities and accelerated digital and intelligent transformation all contributing to
quality and efficiency enhancements that fuel our high-quality development. Second we
made significant strides in our competitive edge. The successful completion of our
refinancing project significantly strengthened our capital structure and opened new chapters
in resource sharing technological collaboration and market expansion. Third we ensured
continuity through smooth management team transition. With seamless management
succession the Xiangyu spirit has been carried forward. Our journey from strength to
excellence continues with unwavering momentum.Looking back as the international economic order continued to shift China’s economy has
shifted from rapid growth to high-quality development. In this evolution Xiamen
Xiangyu’s core competitiveness stems not only from a solid foundation but also from our
resilience and innovation. Our resilience is reflected in our ability to maintain stable
delivery amid global supply chain fluctuations. We have strategically positioned ourselves
across key logistics hubs both at home and abroad integrating each segment of the
industrial chain to build a resilient end-to-end supply chain service platform. Our
innovation comes from forward-looking investment in the digitalization and greening of the
supply chain industry. We are accelerating the application of advanced technologies such as
AI and blockchain in supply chain scenarios fostering unique industrial synergyadvantages in strategic sectors like new energy and advanced manufacturing and
continuously increasing our transformation toward a more digital intelligent and
sustainable supply chain ecosystem.Looking ahead to 2025 as technological revolutions industrial transformations and global
power dynamics continue to intertwine we will move forward with greater foresight and
resolve continue to weave a resilient and interconnected global supply chain service
network intensify our efforts in resource integration and strategic channel deployment
while fostering an innovation-driven industrial ecosystem a green and sustainable business
model and a resilient and high-performance supply chain system that together will serve as
the engine driving the future of the industry.As the tide of progress surges forward we are poised to embark on a new journey with full
sails. With the strong support of our shareholders and all sectors of society we will stand
united and move forward together maintaining an enterprising spirit that never wavers and
a bold resolute drive to forge ahead. Staying proactive and committed we will steadily
advance toward our vision of becoming a world-class supply chain service enterprise
striving to create greater value for our customers and investors alike.Xiamen Xiangyu Co. Ltd.Chairman: Jie Wu
April 22 2025I. Key Accounting Data and Financial Indicators
Unit: RMB Million
YoY
FY2024 FY2023 Change FY2022
(%)
Total Assets 123872.66 129705.19 -4.50 115119.21
Equity Attributable
to the Shareholders
of the Listed 23821.81 20841.31 14.30 17091.57
Company
Operating Revenue 366670.61 459035.45 -20.12 538148.06
Net Profit
Attributable to the
Shareholders of the 1418.82 1573.94 -9.86 2636.90
Listed Company
Net profits
Attributable to the
Shareholders of the
Listed Company 406.50 507.30 -19.87 2655.99
before
Nonrecurring Gains
and Losses
Net Cash
Generated from 5604.44 5586.55 0.32 6222.99
Operating Activities
Weighted Average
Return on Net Assets 7.15 9.29 Decrease by 2.14
(%) ppt
18.06
Basic Earnings Per
Share (RMB/share) 0.48 0.63 -23.81 1.10
Diluted Earnings Per
Share (RMB/share) 0.48 0.63 -23.81 1.10
II. Industry Analysis During the Reporting Period
1. Analysis of the Industry's Operating Conditions
In 2024 China’s economy sustained stable and progressive growth with high-quality
development advancing steadily and new quality productive forces evolving incrementally.However confronted with a complex and severe landscape marked by mounting external
headwinds and internal constraints China's bulk supply chain enterprises continued to
grapple with multifaceted challenges: first year-on-year profit declines among industrial
enterprises increasing pressure on profit margins across certain industrial chains thereby
squeezing profitability for supply chain service providers; second persistent sluggishness
in downstream manufacturing demand coupled with price volatility and inventory buildup
in distribution channels further undermined commodity circulation efficiency; third
1escalating unilateralism and protectionism impediments to multilateral trade frameworks
and proliferating tariff barriers jeopardized the stability of global industrial and supply
chains disrupting the smooth flow of international economic activity.In response to market changes leading bulk supply chain enterprises leverage their service
advantages and channel capabilities focusing on core product categories to further increase
their market shares in niche segments. They optimize customer and supplier structures
diversify upstream and downstream channels and mitigate operational risks. Additionally
they adjust product portfolios to tap into structural opportunities within the industry
hedging against cyclical fluctuations. Seizing strategic momentum they expand into key
manufacturing segments of the industrial chain securing critical positions. Furthermore
they actively develop international clientele to access incremental markets and explore
digital and intelligent application scenarios to enhance supply chain efficiency.Over the past year while profits of industrial enterprises remained in decline the prompt
implementation of a comprehensive policy portfolio has facilitated a sustained recovery in
industrial performance with a gradual rebound in the supply chain sector's profitability.Although persistent geopolitical tensions have heightened volatility risks in international
markets they have simultaneously reinforced Chinese enterprises' determination to expand
globally indicating continued vast potential for international supply chain development.Concurrently technological innovations such as AI are progressively being integrated into
industrial and supply chains potentially driving transformative upgrades in supply chain
efficiency and operational paradigms.In 2025 China's economic development will continue to face a complex and challenging
external environment. However the country's fundamental trend of long-term economic
improvement remaining unchanged. As the government adopts more proactive and
effective macroeconomic policies the procurement demand for bulk raw materials will be
stimulated and credit risks among customers are set to ease. Against this backdrop the bulk
supply chain industry is expected to witness marginal improvements in both demand and
profitability with leading enterprises demonstrating enhanced operational resilience.
2. Industry Development Trends
2(1) Industry Restructuring Creates Share Gains and Integration Opportunities for
Leading Companies
Surging volatility in global commodity prices coupled with cyclical and structural
headwinds across select industries has heightened operational pressure on bulk commodity
supply chain players. Top-tier companies relying on strengths in resource access
value-added services and risk control are actively scaling their channel networks and
capturing greater market share showcasing strong counter-cyclical expansion capacity. On
a volume basis the CR51 market share2 of China’s bulk commodity supply chain industry
rose from 4.81% in 2021 to an estimated 5.26%3 in 2024 reflecting a pronounced leader
effect and rising market concentration. Meanwhile accelerating asset restructuring across
the industrial chain is unlocking new opportunities for leading players to move upstream
into manufacturing further extending the operational boundaries of the supply chain sector.Figure 1：Operating Volume and Market Share Figure 2：the Company’s Operating Volume
of CR5 in China’s Bulk Supply Chain and Market Share in China's Bulk Supply
Industry Chain Industry
1 specifically referring to Wuchan Zhongda Group Co. Ltd. Xiamen C&D Inc. Xiamen ITG Group
Corp.Ltd. Xiamen Xiangyu Co. Ltd. Zheshang Development Group Co. Ltd..
2 the CR5 market share = the CR5 business scale/ the scale of China’s bulk supply chain market scale
where the CR5 business scale represents the combined operating (or sales) volume of the supply chain
segments of the CR5 companies and the scale of China’s bulk supply chain market scale is the sum of
the domestic production and import volumes of major bulk commodities.
3 for CR5 companies that have not disclosed full-year operating/sales volume estimates are based on
doubling their half-year volume data.
3(2) Customer Demand Evolution Drives Deeper Integrated Supply Chain
Convergence
At a critical juncture where manufacturing enterprises are experiencing a shift in growth
pace structural optimization and transformation of growth drivers the era of high-quality
development has raised the bar for supply chain services—manufacturing clients now
demand greater cost efficiency and operational effectiveness. Leading supply chain players
are evolving their business models focusing on supply bundling process integration value
chain expansion and regional collaboration. Cross-category integration of upstream and
downstream channels along with logistics capabilities has become a critical competitive
differentiator. By leveraging the synergy between trade and logistics top-tier supply chain
companies can efficiently allocate resources by harnessing upstream and midstream
channel control and networked logistics services. This enables seamless flow of
multi-category product across the entire supply chain further deepening the integrated
full-industrial-chain operating model and enhancing service advantages.
(3) Geopolitical Shifts Reshape Industry Security and Global Landscape
Geopolitical tensions are undermining the security of global industrial and supply chains
disrupting international economic flows and intensifying the imperative for resilient
cross-border networks. In response Chinese enterprises are accelerating the buildout of
resource networks along the Belt and Road countries and establishing regional supply
chain hubs through overseas manufacturing bases. Concurrently geopolitical conflicts are
accelerating the restructuring of the global energy landscape prompting China to expedite
the development of a more robust energy security framework. These trends are expected to
drive substantial demand for overseas sourcing international logistics cross-border
e-commerce and advisory services. Supply chain leaders with first-mover advantage in
developing overseas sourcing and logistics corridors building localized teams and
delivering integrated services are well positioned to meet rising offshore supply chain
demand from Chinese enterprises and unlock incremental growth across international
markets.
(4) Tech Breakthroughs Fuel Digital Supply Chains and Value Chain Extension
As manufacturing enterprises place increasing demands on improving the quality and
4efficiency of supply chains coupled with occasional risk incidents supply chain security
has been elevated to a strategic priority accelerating the urgency of digital and intelligent
transformation across the sector. Leading players are actively advancing practical
applications of digital intelligence. Having initially focused on building foundational
infrastructure—such as digitized logistics facilities secure warehouse systems multimodal
transport integration and freight resource consolidation—they are now pivoting toward
more advanced integrated solutions including intelligent supply chain finance digital risk
control systems and smart industrial service platforms.Cloud computing big data artificial intelligence blockchain and other technologies are
booming and gradually penetrating into the bulk supply chain service industry. These
advancements will effectively improve the synergistic efficiency of each link in the bulk
supply chain enable platform-based sharing of logistics goods information and capital
flows and drive the optimization and upgrading of the industrial supply chain.III. Business Analysis During the Reporting Period
The Company specializes in bulk supply chain services with manufacturing enterprises as
its core customers. It provides comprehensive supply chain solutions covering the
procurement of bulk raw and auxiliary materials product distribution logistics and delivery
supply chain finance and information consulting etc. The Company is committed to
becoming a world-class supply chain service provider.
1. Business Structure
In terms of product portfolio based on customer needs and its own business philosophy the
Company applies the following product selection criteria: * high liquidity and easy
monetization; * high standardization and easy storage; * substantial demand with
extended industrial chains that enable integrated multi-stage services. The Company
currently focuses on bulk commodities including metallic minerals agricultural products
energy and chemicals and new energy materials covering seven core categories: ferrous
metals aluminum stainless steel new energy coal oil and grains.
5Figure 3: Breakdown of Combined Spot and Futures Gross Profit in 2024
In terms of customer structure the ratio of Company’s service volume for manufacturing
clients remains stable at over 60% in 2024. Specifically around 80% of services are within
the new energy supply chain over 70% within the ferrous metals coal and aluminum
supply chains and over 60% within the stainless steel and over 50% within the grain
supply chains.In terms of regional layout the Company has established 10 platform companies across
China expanding its business presence to cover 34 provincial-level administrative regions.Its core business area is gradually extending from coastal regions to inland areas with a
focus on tapping the supply chain demand of modernized industrial clusters in central and
western China.In recent years the Company has strategically positioned itself along the Belt and Road
Countries actively expanding into international markets. It has established subsidiaries or
representative offices in 10 countries and regions including Singapore the United States
Germany Saudi Arabia New Zealand Indonesia Vietnam and South Africa. Its business
partners now span more than 110 countries with a strong focus on connecting with
premium procurement and distribution channels aboard and exploring the overseas supply
chain demands of large Chinese enterprises.
6Figure 4: Company’s Global Business Footprints
2. Business Model
The Company has always adhered to a customer-centric approach extending upstream to
secure resources and downstream to expand channels along the industry chain. Its serviceofferings have evolved from single-point solutions to an integrated “ full-industry chainservice model” with Xiangyu characteristics covering raw material procurement finished
product distribution inventory management warehousing and logistics supply chain
finance. After achieving service advantages across the entire industry chain the Company
seized the opportunity to tap into value-adding manufacturing segments forming an
industrial chain operation model of “Supply Chain Services + Products Manufacturing”
which further enhanced comprehensive revenue profitability and buffered cyclical
fluctuations.In the era of digital intelligence the Company has accumulated a vast array of service cases
and experience data from specific business scenarios enabling it to swiftly respond to
customer needs and recommend suitable products and services. By taking advantages of its
distinctive “trade-logistics linkage” the Company integrates regional warehouses and
cross-regional logistics and through the application of bulk commodity price management
tools provides value-added services to manufacturing clients and deliver customized
7supply chain solutions.
Figure 5：Company's Operating Model
3. Profit Model
The Company prioritizes service and scale-driven profitability and is supplemented by
price differentials to generate profits. For a detailed breakdown of the Company’s profit
8please refer to the table below.
Table 1: Profit Structure and Definitions
Types of Profit Interpretation
Based on its platform advantages and scaled operations the Company
provides customers comprehensive services across the entire industry
Service Profits chain. These offerings encompass procurement and sales processing
logistics and distribution supply chain finance and information
consulting through which the Company generates service-based revenue.Scale-based
Relying on its large business scale the Company achieves cost advantages
Profit from
through centralized procurement and specialized operations reducing
Cargo
Transaction operational costs across various segments and generating trading gains.Consolidation
Profits
Profits By utilizing its expertise in professional analysis the Company conducts
from Price trades by studying commodity price trends over time and regional price
Differentials differences across various areas to generate profitability.
4. Strategy Overview
To support its core bulk commodity supply chain services the Company has pioneered anindustry-leading network-based logistics system integrating “Highway Railway Waterwayand Warehousing” to connect both domestic and global markets. Capitalizing on industry
cycles the Company strategically tapped into manufacturing extending its service scope
and expanding its operational boundaries. Today the Company has established three key
manufacturing segments—shipbuilding mineral processing and oil processing. In addition
the Company has achieved deep synergy with its controlling shareholder in the
manufacturing segments of the stainless steel aluminum and corn industry chains further
amplifying its supply chain service advantages and unlocking additional growth potential.Adhering to the strategic vision of "Rooted in Supply Chains Serving Industry Chains and
Creating Value Chains" the Company will expand its global supply chain network by
continuously deploying strategic overseas logistics hubs; strengthen its commercial
influence by making minority equity investments in upstream mining rights securing
critical resources across core industries; and integrate downstream channels to unlock
end-to-end circulation and service markets.
5. Global Development Landscape
Amid profound changes in the global economic landscape the Company had harnessed its
9years of industry expertise and channel resource advantages to establish a globaldevelopment framework featuring “Led by Supply Chain Supported by Logistics andDriven by Investment”.First the Company is building regional industrial ecosystems with global competitiveness.In Southeast Asia it has developed a full-industry chain model featuring “ResourceImportation Advanced Processing and Global Distribution” supported by a localized
logistics network and extending its reach across ASEAN markets. In Africa the Company
has built an integrated mineral supply chain to ensure the stable delivery of high-quality
bauxite and titanium ore from West Africa. Its beneficiation plant in Nigeria has achieved a
service coverage rate of over 90% complemented by the innovative establishment of a
centralized procurement laboratory. In the Democratic Republic of the Congo(DRC) its
copper and cobalt services support leading new energy enterprises enhancing both resource
access and brand influence. In the Americas the Company continues to deepen cooperation
in mineral agricultural and energy trade improving its regional industry presence. In the
Middle East and Oceania it cultivates high value-added product trade to support the global
expansion of Chinese manufacturing. In traditional resource-rich countries like Australia it
has built stable and diversified supply channels to safeguard national energy resources.Second the Company is systematically advancing its global logistics capabilities. It has
established major international logistics corridors including China-Southeast Asia
China-Africa and China-Europe/Central Asia railway express. It has developed and fully
operates multiple premium routes across East West and Southern Africa continuously
enhancing its multimodal domestic and international transport capacity. To date the
Company has built a global logistics service network partnered with over 200 high-quality
overseas suppliers and established more than 150 overseas warehousing nodes. It operates
self-managed warehouses in key hubs such as Vietnam the United States and the
Netherlands. Tailored logistics services have been developed for the aluminum and new
energy industry chains focusing on emerging markets like Southeast Asia and Africa with
integrated customs clearance warehousing and distribution services to provide
comprehensive support for the global expansion of Chinese manufacturers.Third the Company pursues targeted overseas investment with a global perspective. In the
10metallic mineral segment it aligns with national resource security strategies by investing in
resource-rich regions such as Southern and Western Africa. Through equity investments
and long-term agreement procurement it has built stable overseas supply channels
including the joint venture shipping company in Guinea and the joint venture mineral
company in Zimbabwe. In the new energy segment aligned with the “dual carbon” strategy
the Company has enhanced its industrial layout in Southeast Asia and Europe expanded
photovoltaic re-export business and promoted the internationalization of Chinese
technologies and standards. In the automotive and agroforestry segments it has cultivated
its presence in Belt and Road markets and extended the value chain through localized
operations in the Middle East and New Zealand.IV. Analysis of Core Competitiveness During the Reporting Period
1. Networked Logistics Service Capability
As a national 5A-level logistics enterprise the Company has developed three key logistics
operating entities (Xiangyu Superchain Xiangdao Logistics Xiangyu Agricultural
Products) and has built a team of specialized market-oriented and internationally
experienced logistics service professionals. Leveraging long-term strategic partnerships
with key logistics resource operators such as COSCO Shipping China Merchants Group
and Shandong Port Group the Company has taken the lead in the establishment ofnetworked logistics service system that centered on “Highway Railway Waterway andWarehousing” connecting both domestic and international markets. This system includes a
railway transportation network that connects the east and west regions and links the north
and south regions a nationwide highway transportation network a waterway network
based on major domestic ports and extending to countries along the Belt and Road Regions
and warehouse clusters covering coastal areas in the east and bulk distribution hubs in the
central and western regions. It also connects to international markets through ocean
shipping and cross-border freight trains enabling the development of integrated logistics
corridors and localized logistics operations overseas.The Company fully takes advantage of multi-modal transport routes to provide customers
with high-quality end-to-end and customized bulk commodity logistics solutions.
11Domestically it has developed a number of premium routes such as “Cross-provinceCirculation of Aluminum Products” “North-to-South Grain Transportation” “West-to-EastCoal Transportation” and “ North-to-South Coal Transportation”. Internationally the
Company has established international logistics corridors including the China-Europe and
China-Central Asia railway express as well as international routes such as China-Indonesia
China-Vietnam and China-Thailand China-Africa and China-Australia.The networked logistics service system is not only one of the Company’s core capabilities
in serving manufacturing customers but also an important cornerstone for the Company’s
cargo rights control and business digital transformation.During the reporting period the Company was ranked second among the Top 50 Chinese
Logistics Enterprises of 2024 ranked second among the Top 100 National GeneralWarehousing Enterprises of 2023 and recognized as “Advanced Unit in the Construction ofChina’s Digital Warehousing Standard System” for 2023. It was also selected as “2024 FirstBatch of CFLP Benchmark Cases for National Logistics Cost Reduction”.Table 2: Logistics Resources and Capabilities
Category Resources Capacity
The Company operates 12 railway cargo stations (10 self-owned and 2 managed)
covering major commodity distribution hubs in the central and western China. These are
supported by 87 dedicated railway lines approximately 3.8 million square meters of
container yards and warehouses and over 30000 self-owned containers. The annual
transportation capacity exceeds 57 million tons ranking among the top in the industry.The Company has also developed high-quality transportation routes for coal and
4 aluminum products such as “ Shandong/Henan-Xinjiang” andRailway
“Shaanxi-Yunnan/Guizhou/Sichuan”. Internationally the Company has developed
round-trip circulation routes centered on the Eurasian continent with its partnership
network covering over 80% of China-Europe Railway Express platforms nationwide. It
has also deployed self-owned containers to continuously enhance the operational capacity
of China-Europe and China-Central Asia freight trains. In addition the Company has
taken a forward-looking approach by laying out logistics corridors across the Caspian
Sea aiming to build comprehensive international multimodal transport capabilities.It has built a network freight transportation platform to fully leverage the value of digital
freight services enhance vehicle-cargo matching efficiency enable real-time
Highway
transportation tracking and achieve end-to-end transparent management from shippers to
carriers thereby boosting quality and efficiency across the supply chain. During the
4 including Yulin Xiangdao which is managed under trust by the Company’s subsidiary Xiangdao Logistics.
12Category Resources Capacity
reporting period the Company operated approximately 1000 self-owned vehicles and
integrated more than 160000 third-party vehicles achieving a total freight volume of
over 23 million tons.Domestically the Company owns 3 multi-purpose domestic vessels and integrates over
1200 social vessels forming a “self-owned + partnership” water transport capacity
configuration. It has formed strategic partnerships with leading port and shipping
operators such as China Merchants Port Group Shandong Port Group COSCO
SHIPPING Ports and Tianjin Port Group. During the reporting period the Company’s
domestic coastal and Yangtze River transportation volume exceeded 25 million tons.Overseas the Company owns 2 vessels and continues to integrate international collection
Waterway
and distribution shipping resources building capabilities in international dry bulk and
container shipping logistics. During the reporting period the China-Indonesia logistics
corridor cargo volume was approximately 26 million tons achieving a 50% year-on-year
increase; the China-Africa logistics corridor exceeded 3 million tons achieving a 270%
year-on-year increase; theChina-Vietnam and China-Thailand logistics corridor handled
36000 TEU achieving a 20% year-on-year increase; and the China-Australia logistics
corridor transported over 2 million tons establishing stable route operation capabilities.Domestically the Company has established 5 major grain procurement platforms with its
own and partnered storage capacity of approximately 12 million tons equipped with 20
dedicated railway lines. It operates 69 self-owned and leased warehouses covering an
area of over 1.6 million square meters and has 8 stacking yards with an area of over
500000 square meters. The Company holds 20 approved futures delivery licenses with a
Warehousing warehouse capacity of about 1 million tons. Overseas the company maintains a regular
inventory of 50 storage nodes with forward-looking strategic layouts in more than 150
locations covering Southeast Asia Africa Central Asia the Middle East and Europe. It
has also launched self-operated overseas warehouse businesses in key logistics hubs such
as Vietnam the United States and the Netherlands establishing comprehensive logistics
service capabilities abroad.
13Figure 6: Company's Nationwide and International Networked Logistics Service
Ecosystem
2. Digitalized Supply Chain Service Capability
The Company focuses on three core goals: expanding incremental markets improving
service efficiency and elevating business model. Leveraging vast business data extensive
customer resources and diverse application scenarios it has built an intelligent information
technology system. Based on its smart logistics system the Company continues to enhance
its digital service capabilities and has developed the YuLianTong digital supply chain
service platform facilitating efficient matching between capital providers and customer
demands. During the reporting period the YuLianTong platform reached a total credit line
of RMB 13.7 billion with annual credit utilization by customers amounting to
approximately RMB 3.6 billion representing a year-on-year growth of over 30%.
14Figure 7: YuLianTong Digital Supply Chain Service System
Furthermore the Company has established an integrated system that covers modules like
financial control human resources management customer relations risk management and
equipment & asset management providing comprehensive support for business operations.Through enterprise management analysis systems customer analysis and big data
operation systems the Company sorts extracts and mines extensive business data to
support business decision-making. Currently the Company's core information system is
integrated with the DeepSeek Large Language Model marking the official beginning of a
new phase in the integration of “AI + Industry”. This empowers the development of new
productive forces through artificial intelligence injecting new momentum into the
Company's and the industry’s high-quality development.
3. Systematic Risk Management Capability
The Company firmly grasps the foundations of risk control by targeting manufacturing
enterprises as its core clients and focusing on highly liquid easily convertible standardized
and storable bulk commodities as its main products. It adapts the composition of these
products dynamically based on industry cycle changes to strengthen its ability to hedge
against cyclicality.The Company has always maintained a reverent attitude towards the market prioritizing
risk control over profit and scale. It has currently established three lines of defense for
operational risk (i.e. frontline business departments headquarters risk control departments
and headquarters audit departments). It implements a multi-departmental joint collective
15prevention and control mechanism around the establishment of pre-control management
systems in-process management post-event review and system optimization.
4. Global Channel and Resource Integration Capability
The Company has cultivated a strong customer base comprising top-tier enterprises in
industries such as metal minerals agricultural products energy and chemicals and new
energy establishing a mature and stable global business network. Through close
collaboration with customers from upstream and downstream at home and abroad fund
providers technology support providers and logistics service providers the Company
integrates abundant industry resources information resources logistics resources and
financial resources to provide customers with integrated supply chain solutions. As a result
the Company's resource advantages are increasingly strengthened its business model is
becoming more mature and its upstream bargaining power downstream distribution
capabilities and comprehensive supply chain service capabilities are continuously
enhanced.
5. Multidimensional Industry Research Capability
The Company has established a three-tier research framework consisting of Research
Institute at the Group Headquarters Industry Research Department of the Corporation and
Research Departments within front-line operating entities. It boasts a team of dedicated
researchers with an international perspective conducting research across macroeconomic
industry product business development and risk management dimensions. This enables
continuous iteration of research methodologies across various industry chains. The
Company has also built comprehensive supply chain databases encompassing operations
finance logistics risk management and human resources accumulating vast amounts of
data. Meanwhile it strengthens the collaborative synergy between industry research and
front-line business and operations management empowering the Company's business
operations risk control and business model upgrading and contributing to the Company's
high-quality development.
6. Specialized Supply Chain Service Team
The Company places a strong emphasis on talent development and team building
16cultivating a market-driven specialized and globally-oriented supply chain service team
which could provide professional supply chain solutions tailored to customer needs.Meanwhile the Company consistently enhances its international human resources system
through a dual strategy of external recruitment and internal training cultivating an elite
talent pool with an international perspective and service expertise with services covering
regions such as Southeast Asia Africa Europe and the United States. Additionally the
Company’s team management and performance evaluation mechanisms are highly
market-oriented with continuous innovation in incentive programs effectively motivating
core management and front-line business teams to demonstrate initiative proactivity and
creativity.V. Management Discussion and Analysis of Business Operation
1. Key Operating Results for 2024
In 2024 China’s economy demonstrated overall stability with progress but the adverse
effects of external environmental changes continued to deepen. The procurement demand
from downstream manufacturing customers remained weak and commodity prices faced
pressure. In response to market fluctuations the Company has remained committed to its
platformization globalization and digitalization strategies taking its advantages of
resource integration and trade-logistics linkage. The Company has also drawn valuable
lessons from past experiences to optimize and adjust its organizational structure
management practices and operational strategies. These efforts have further strengthened
the foundation for sustainable development leading to overall business stabilization and
improvement. During the reporting period the Company reported revenue of RMB
366.671billion representing a year-on-year decrease of 20.12%; net profit attributable to
the parent company reported RMB 1.419 billion a year-on-year decrease of 9.86%.Excluding the impact of credit impairment losses the net profit attributable to the parent
company increased by over 7% year-on-year signaling the initial positive results of the
management optimization efforts.The Company’s platform-driven momentum has steadily advanced. During the reporting
period the total operating volume remained above 200 million tons with aluminum new
17energy materials and Mongolian coal maintaining leading market shares; the trading
volumes of lithium and iron ore increased by over 160% and 20% year-on-year
respectively further strengthening the Company’s industry position and resource network
advantages; the agricultural supply chain segment returned to positive gross margins on
spot and futures operations; the shipbuilding segment saw record highs in both new order
volume and order profitability contributing stable and sustainable profits to the Company.In addition the Company established a Steel Center by integrating its ferrous metals supply
chain coordinating internal and external resources to build a comprehensive operational
management system. Through deeper integration across Trade-Logistics Trade-Trade and
Trade-Manufacturing models the Company is addressing clients’ diverse service needs
improving operational efficiency and enhancing customer loyalty—exploring the optimal
path for specialized and intensive development.The Company has achieved significant breakthroughs in international expansion with its
global business now covering over 110 countries. During the reporting period the
Company recorded a total import export and re-export volume of approximately USD 22.4
billion with import and export volume totaled approximately USD 14.4 billion. The total
trade volume with BRICS countries Belt and Road regions and countries in South
America and Africa grew by over 50% year-on-year with exports increasing by over 60%.The Company continued to strengthen its international logistics channel advantages: The
China-Indonesia corridor recorded a year-on-year cargo volume increase of over 50%
maintaining a leading market share; the China-Vietnam and China-Thailand corridor
achieved growth of over 20%; and the China-Africa corridors surged by 270%. The
specialized logistics volume in the aluminum industry chain grew against the trend by over
45%. Additionally the Company entered into a strategic partnership with a leading bauxite
mine in West Africa to establish a joint venture shipping company. This collaboration will
leverage the partner's cargo volume to build owned capacity for the West Africa-China
route enhancing the Company’s aluminum supply chain layout. Furthermore in early 2025
the Company established a subsidiary in South Africa accelerating business expansion in
Africa through the integration of logistics and trade. Due to the synergy between trade and
logistics the Company’s aluminum and new energy supply chains have taken the lead in
18setting a practical benchmark for international full-industry chain services paving the way
for scaling up its global integrated supply chain service capabilities with proven models and
experiences.The Company’s digitalization and intelligence-driven capabilities have become
increasingly prominent. The YuLianTong platform has further expanded its product matrix
and specialized scenarios. Leveraging transaction data accumulated from years of supply
chain services the platform has introduced the new YuShuRong sub-product effectively
enhancing downstream customers’ access to banking finance and improving efficiency
which boosts increasing customer loyalty in turn. The ZhiYun network freight platform
collaborated with the merchandise operation and logistics teams to jointly develop large
industrial clients unlocking the value of digital freight deeply integrating capacity
resources and empowering business operations. Additionally the LiangLianTong platform
has introduced new products such as MaiLiangBao and AnXinCun which improve banking
financing efficiency for customers in planting procurement and storage while utilizing
derivative tools to help customers manage pricing risks.After two years of exploration and adjustments the Company has further emphasized
"Product & Research First" in strategic approach "Logistics First" for international
expansion and "Risk Control First" in business management. The business model centered
on serving manufacturing clients has demonstrated strong self-repair capabilities and
development resilience. In 2024 the Company’s business fundamentals continued to
stabilize and improve. It swiftly responded to and mitigated the risks from a key customer
incident in the second half of the year quickly summarizing lessons learned and
strengthening the risk control system. This included: (1) steadily advancing the
construction of digital and intelligent risk control (2) revising and improving the industry
research and risk alert system and (3) gradually phasing out inefficient and high-risk
businesses. During the reporting period the Company optimized and improved its customer
structure and business composition increased the proportion of service revenue and
enhanced its ability to achieve win-win cooperation with upstream and downstream
partners by using derivative tools. As a result the Company’s business stability and growth
resilience have been further strengthened.
19With the government rolling out proactive policies to boost domestic demand stabilize
expectations and stimulate vitality the economy is poised for a sustained recovery. The
Company is confident in its ability to overcome development bottlenecks and strengthen
the foundation for sustainable growth despite industry cyclical fluctuations. Taking the
preparation and implementation of its next five-year strategic plan as an opportunity the
Company aims to return to the path of high-quality development.
2. Key Business Data for 2024
(1) Bulk Commodity Trading
The Company leverages bulk commodities as its core business entering into
comprehensive agreements with clients to offer integrated supply chain services
encompassing procurement distribution logistics supply chain finance information
consulting and processing. The revenue and profitability from this segment are reflected in
the results of core commodity trading as outlined below:
Unit: billion RMB
Combined Futures Combined Futures
Operating
Operating Volume and and Spot
Revenue
Spot Gross Profit Gross Profit Margin
Category
Volume
(mn metric YOY Amount YOY Amount YOY Value YOY
tons)
Increase by
Commodity Trading 224.48 -0.30% 345.3 -21.39% 6.318 2.85% 1.83%
0.43 ppt
Among these: Increase by
139.846.53%214.9-20.84%4.538-12.34%2.11%
Metallic Mineral 0.20ppt
Turned Turned
Agricultural Products 13.90 -31.71% 40.2 -33.73% 0.382 0.95%
profitable profitable
Decrease by
Energy and Chemical 70.20 -4.05% 80.1 -7.78% 0.839 -20.07% 1.05%
0.16 ppt
Increase by
New Energy 0.54 47.03% 9.3 -51.92% 0.499 45.85% 5.39%
3.62ppt
Note: The Company provides integrated supply chain services and engages in spot trading to support its operations. It
utilizes futures instruments to hedge against price volatility in the commodity markets resulting in changes in fair value
and gains or losses from the disposal of such instruments. The combined gross profit and gross profit margin of the futures
and spot trading are calculated after accounting for the hedging gains or losses.In the metallic mineral supply chain the Company maintained its competitive advantage in
Mongolian coal imports and expanded its presence in bauxite and ferrochrome resources
20across Africa and Southeast Asia as well as in steel markets in the Middle East Africa and
South America with ferrochrome imports volume increased by over 30% year-on-year
while steel exports surged by more than 150%. Gross profit margin of the aluminum supply
chain (spot and futures combined) rose significantly by 1.12 percentage points year-on-year.However due to subdued demand and declining prices in the ferrous and stainless steel
industrial chains both revenue and gross profit declined year-on-year.In the agricultural supply chain the Company strengthened flow management and
inventory rotation expanded service-oriented and import businesses enriched the
LiangLianTong product system and enhanced asset turnover efficiency and warehouse
utilization. Against the backdrop of continued price decline in bulk grain commodities the
segment successfully turned profitable at the gross margins on spot and futures operations
level and maintained a steady upward trend in business performance.In the energy and chemical supply chain the Company increased the proportion of direct
coal mine procurement explored new crude oil supply channels and achieved steady
growth in overseas business volume along the oil industry chain. Nevertheless due to
weaker demand and falling price centers in the steam coal and oil segments both revenue
and gross profit decreased year-on-year.In the new energy supply chain the Company strengthened upstream access to critical
lithium resources both domestically and internationally deepened collaboration with
leading lithium salt processors midstream and acquired new terminal clients at home and
abroad downstream. As a result both business volume and profitability achieved significant
year-on-year growth. However overall revenue declined due to the drop in commodity
prices.
(2) Bulk Commodity Logistics
While meeting the internal logistics needs of its supply chain operations the Company has
also leveraged its internal business foundation to develop market-oriented logistics service
capabilities which in turn feed back into and empower its supply chain operation creating
a mutually reinforcing cycle between commodity operations and logistics services. In
21parallel the Company is building dual capabilities: the ability to provide integrated
industrial logistics solutions across the value chain and the execution expertise to deploy
these solutions operationally. This approach has accelerated the formation of a logistics
system in which industrial resources and logistics services drive and enhance one another.The operating results of the Company’s market-oriented logistics services are accounted for
separately as outlined below:
Unit: million RMB
Operating Revenue Gross Profit Gross Profit Margin
Category
Amount YOY Amount YOY Value YOY
Commodity
9422 32.99% 837 19.03% 8.88% Decrease by 1.04 ppt
Logistics
Among these:
Integrated 6171 11.38% 661 20.11% 10.71% Increase by 0.78 ppt
Logistics
Railway Logistics 2845 126.90% 132 158.45% 4.64% Increase by 0.57 ppt
Agricultural Decrease by 22.34
249-14.14%32-68.70%12.82%
Product Logistics ppt
Aluminum Not Not
157 12 7.95% Not applicable
Industry Logistics applicable applicable
Note: Railway logistics agricultural logistics and aluminum industry logistics refer respectively to the market-oriented
logistics services provided by the Company’s subsidiaries Xiangdao Logistics Xiangyu Agricultural Products and
Xiangyu Aluminum Union. Integrated logistics refers to the market-oriented logistics services offered by Xiangyu
Superchain and other logistics subsidiaries. Specifically agricultural logistics mainly covers services related to national
and provincial grain reserves while aluminum industry logistics and integrated logistics primarily include international
shipping routes cross-border rail freight services inland waterway transport highway transportation and warehousing
services both domestically and overseas.Integrated Logistics: The Company deepened partnerships with industrial clients and
expanded its warehousing network. It newly obtained three futures delivery qualifications
establishing a delivery warehouse system covering 15 types of commodities across its four
major business segments. Meanwhile the Company drove significant growth in both
domestic north-south logistics corridors and international routes to Southeast Asia and
Africa. It also consolidated its market share advantage on the China-Indonesia route and
developed premium services for Asia-Europe railway express resulting in year-on-year
growth in both revenue and gross profit.Railway Logistics: The Company strengthened its presence in the coal and aluminum
industrial chains achieving a substantial increase in Xinjiang Coal Outbound
22Transportation. It also it expanded rail-to-port bauxite logistics as well as logistics services
for lithium ore lithium carbonate and other new energy industry materials accelerating the
deployment of high-quality capital-light hubs and improving turnover efficiency of
self-owned containers which drove year-on-year growth in both revenue and gross profit.Agricultural Logistics: Due to reduced volumes from national reserve falling corn prices
inverted price differentials between northern and southern regions and cautious
downstream procurement and cargo volumes decreased leading to year-on-year declines in
both revenue and gross profit. However by capitalizing on reserve replenishment
opportunities in Fujian and Guangdong provinces and centrally administered warehouses
the Company expanded third-party storage volumes and successfully launched the
innovative “CunLiangBao + AnXinCun” product system. As a result combined volumes
across four key categories—provincial reserves temporary reserves third-party reserves
and CunLiangBao—achieved a 37% year-on-year increase.Aluminum Logistics: In September 2023 the Company established Xiangyu Aluminum
Union a specialized subsidiary dedicated to aluminum logistics. Leveraging its existing
logistics infrastructure and customer base and underpinned by a comprehensive domestic
multi-modal network (Highway Railway Waterway and Warehousing) the Company
focused on building an end-to-end international logistics corridor from overseas mines to
domestic distribution hubs accelerating the development of specialized logistics
capabilities for the aluminum supply chain. During the reporting period it prioritized
serving major aluminum producers and developed premium logistics routes both at home
and abroad reaching a service volume of 3.38 million tons.
(3) Production & Manufacturing
After establishing a service advantage throughout the industry chain the Company
strategically ventured into the value-added production and manufacturing sector. This move
resulted in the development of an integrated industrial chain operating model that combines
supply chain services with production and manufacturing the objective is to enhance
overall profitability and mitigate the impact of cyclical fluctuations in the industry. The
operating results in the manufacturing segment for this period are as follows:
23Unit: billion RMB
Operating Revenue Gross Profit Gross Profit Margin
Category
Amount YOY Amount YOY Value YOY
Production & Decrease by 0.52
11.12.54%1.292-1.86%11.60%
Manufacturing ppt
Among these: Decrease by 4.43
5.924.76%1.0720.27%18.13%
Shipbuilding ppt
Note:
a. The manufacturing segment includes shipbuilding beneficiation and oil processing. The business
entity of shipbuilding sector is the Company's subsidiary Nantong Xiangyu Shipbuilding & Offshore
Engineering. During the reporting period the Company increased its ownership stake in Xiangyu
Marine Equipment from 36% to 51%.b. In the shipbuilding segment exchange rate fluctuations of the U.S. dollar led to a decline in reported
gross profit margin. However by using financial instruments to hedge against foreign exchange risks
the Company achieved a year-on-year increase in actual hedged gross profit margin.In the shipbuilding segment the Company seized market opportunities and persistently
prioritizes brand leadership. Both the number of delivered ships and new orders along with
the order margin reached new highs. The Ultramax series bulk carriers had the largest
order volume globally while the order volume for chemical tankers under 10000 tons
ranked first worldwide. By the end of the reporting period the order book totaled 89 ships
with orders scheduled for delivery until 2029. At the same time the shipbuilding segment
promoted lean production and technological upgrades reducing production costs and
shortening construction cycles resulting in an overall increase in production capacity by
more than 25%. In August 2024 the Company acquired the core assets of Jiangsu
Hongqiang Marine Heavy Industry Co. Ltd. through judicial auction with production
expected to resume by mid-2025. Upon resumption of production it is expected to further
enhance the overall capacity of the shipbuilding segment by 40-50%.
3. Trade-Logistics Linkage: Exploring a Practical Benchmark for International
Full-Industry Chain Services
Against the backdrop of global supply chain restructuring the Company has been actively
exploring differentiated development paths in international markets for years. It
strategically targets industries with complex supply chain structures and high demand for
supply chain services focusing on product categories characterized by supply-demand
mismatches geographically dispersed production chains and high logistics cost ratios. By
24cultivating resource-rich regions with underdeveloped infrastructure through its “LogisticsFirst” overseas expansion strategy the Company has built a first-mover advantage to
capture structural opportunities arising from the regionalization of global supply chains.Although Africa holds abundant mineral reserves its logistics infrastructure remains
relatively underdeveloped with certain types of mineral resources dispersed across
different regions. The Company has targeted Africa as a strategic beachhead market
establishing a local subsidiary to provide integrated logistics solutions and develop
industrialized international routes with initial breakthroughs achieved in the aluminum and
new energy supply chains.
(1) Global Integrated Aluminum Supply Chain Services
China's bauxite supply has maintained an import dependency rate exceeding 60% over the
past three years. While Africa holds nearly 25% of the global reserves the region has long
experienced low development rates and inadequate logistics infrastructure—creating strong
demand for international logistics services and offering substantial market potential.In 2022 the Company established an international aluminum supply chain team and has
since developed a comprehensive global service system across the entire value chain by
strategically deploying key logistics nodes and industrial resources. Upstream it built
Guinea-centric bauxite import channels by leveraging trade-logistics integration; midstream
it entered industrial operations through deep cooperation with its parent company's
electrolytic aluminum plants; downstream it offered integrated export services while
building a recycled aluminum circular system to extend full-chain circulation capabilities.The Company has gradually constructed three core competitive moats: upstream resource
integration trade-logistics synergy and full-chain industrial operation. In 2024 the bauxite
trading volume exceeded 10 million tons including over 7.4 million tons imported from
Africa and alumina trading volume reached nearly 7 million tons securing a top-three
market position in China.
25Figure 8: Company’s Global Integrated Industry Chain Service Model for
Aluminum Supply Chain
At the end of 2024 the Company’s controlling shareholder obtained management rights
over the core aluminum assets acquired through bankruptcy reorganization and established
Xiangyu Aluminum as a new operating entity. Xiangyu Aluminum has an annual
production capacity of 750000 tons of electrolytic aluminum 1 million tons of aluminum
extrusion and 1.8 million tons of aluminum rolling and has also made forward-looking
investments in aluminum fine processing. Depending on business synergy with Xiangyu
Aluminum the Company is set to build a competitive industry chain model integrating
“Manufacturing + Supply Chain Services” further strengthening the stability of upstream
and downstream channels and enhancing its market presence.
(2) Global Integrated New Energy Supply Chain Services
Benefiting from the rapid development of the new energy industry chain China's lithium
ore imports have achieved a compound annual growth rate (CAGR) of approximately 25%
over the past five years reflecting strong market demand. On the international front
although Africa holds abundant reserves of new energy minerals such as lithium cobalt
26and copper these resources are geographically dispersed development remains in early
stages and logistics infrastructure is relatively underdeveloped—creating significant
market potential and opportunities for supply chain and logistics integration.Since 2018 the Company has strategically positioned in new energy supply chains. It has
established a presence across three major segments—lithium batteries photovoltaics and
energy storage—while concentrating on core commodities such as lithium cobalt nickel
silicon wafers battery cells modules and energy storage systems. By integrating the full
industry chain—from raw material mines and upstream smelters to midstream processors
and downstream end-users the Company has established both domestic and international
procurement and sales channels across the entire industry chain providing end-to-end
logistics solutions. It has built an integrated international supply chain service capability.Currently the Company has successfully established comprehensive partnerships with key
players across major lithium production regions including salt lakes and mines in Africa
Australia and Jiangxi China as well as with battery recycling companies and leading
global and domestic manufacturers of batteries and cathode materials. The Company ranks
among the top five in China for lithium carbonate trading volume. In 2024 the gross profit
from spot and futures operations in the new energy supply chain grew by over 45%
year-on-year with trading volumes of lithium ore and lithium carbonate increasing by more
than 160% and 400% respectively.
27Figure 9: The Company’s Global Integrated New Energy Supply Chain Service Model
Figure 10: Global Footprint of the Company's Integrated New Energy Supply Chain
Services
28Building on its strong presence in the lithium battery photovoltaic and energy storage
sectors the Company entered the clean energy sector in 2024 to capitalize on the growing
market opportunities driven by the green energy transition. By integrating its new energy
supply chain capabilities with its established customer base in various industries the
Company has partnered with central power generation groups and local energy corporations
to advance the development of Wind-Solar-Storage Power Plant projects offering
comprehensive low-carbon energy solutions for factories.
4. Key Business Plans for 2025
In 2025 while China’s economic development continues to face a complex and challenging
external environment the nation’s long-term upward trajectory of the economy will remain
unchanged. As the government adopts more proactive and effective macroeconomic
policies China’s economic will forge ahead steadily through the waves. The Company will
fully leverage the lessons learned from the past two years comprehensively refine its
business strategies risk management and organizational structure to accelerate its recovery
from the current performance downturn. Meanwhile the Company will take the preparation
of its next five-year strategic development plan as a pivotal opportunity to thoroughly
review past management shortcomings deeply analyze the phase-specific characteristics of
the new era adapt to economic development trends clarify its strategic positioning and
core competitive strengths in industry chain operations intensify transformation efforts
and drive innovation ultimately shaping a new blueprint for sustainable development.Faced with the significant market shift caused by the recent U.S. imposition of “reciprocaltariffs” the Company promptly developed a response plan. Although the Company’s
business exposure to the U.S. is relatively low and its current operations have not been
severely impacted we will continue to explore diversified markets and global resource
channels to mitigate the operational risks brought by international trade frictions.In 2025 following the completion of the price-locked private placement refinancing the
Company will actively promote strategic collaboration with two powerful strategic
investors China Merchants Group and Shandong Port and focus on the following key
areas:
29Platformization: Building on our industry-leading network-based multimodal logistics
system—which connects domestic and international markets via highway railway
waterway and warehousing—we will enhance our specialized operational capabilities
across core industrial chains. We will also deepen synergies with the controlling
shareholder’s manufacturing segments including aluminum stainless steel and corn
processing. Specifically efforts will focus on strengthening the Company’s end-to-end
international supply chain service capabilities in aluminum and new energy sectors
managing agricultural inventory exposure scaling up service-oriented operations
leveraging the operational efficiency of the Steel Center platform and actively seizing
opportunities from the global energy transition exploring emerging areas such as carbon
trading.International Expansion: We will accelerate the construction of China-Africa
international logistics channels and establish a multi-modal comprehensive logistics
network with Xiangyu characteristics integrating logistics and trade operations to drive
global expansion. Relying on its overseas platform companies we will solidify our
competitive presence in Southeast Asia Africa and South America. By adopting a
capital-light expansion model that exchanges equity for commercial rights we will
expedite access to mineral and primary processed resources in Africa and Southeast Asia.Digitalization: We will promote broader application of the YuLianTong digital supply
chain service platform and the ZhiYun network freight platform along with agricultural
industrial-level internet platforms and smart logistics systems that provide more tailored
and comprehensive service solutions based on customer needs. We will also enhance the
intelligent digital operation and management system and explore the deep integration of
AI-powered solutions with supply chain operations.Organizational Optimization and Capability Enhancement:We will further advance the
integration of our business segments taking the Steel Center as a benchmark. We will
optimize the allocation of resources such as capital and human talent improve the
alignment between capital utilization and operating efficiency and guide product portfolio
optimization. We will also strengthen capabilities in industry research risk management
and the integration of derivatives into supply chain services. Additionally we will improve
30the performance evaluation and incentive mechanisms launching a new round of equity
incentive plans to stimulate team initiative and innovation.Manufacturing: In the shipbuilding segment we will seize the cyclical upturn in the
shipbuilding market focusing on both “capacity expansion and enhancement” and “producttransformation and renewal”; accurately capture orders in alignment with medium- and
long-term market trends while enriching the ship types based on industry demand. In the
beneficiation segment we will focus on developing high-quality overseas mines and
exploring deeper engagement with key clients; by strengthening collaboration with steel
mills across all dimensions and delivering customized products we aim to enhance
customer stickiness. In the oil processing segment we will continue to pursue partnerships
with premium crushing plants and accelerate the integration of crushing capacity layout
driving the expansion of the soybean supply chain business.VI. Discussion and Analysis on the Company’s Future Development
1. Industry Landscape and Trends
In December 2024 the Central Economic Work Conference conducted a thorough analysis
of the current economic landscape affirming that China’s economy long-term positive
trajectory remains unchanged. During the 2025 “Two Sessions” in March the Government
Work Report highlighted China’s distinctive institutional advantages including its
supersized domestic market etc. It also made clear that more proactive and effective
macroeconomic policies will be implemented to expand domestic demand and promote
sustained economic recovery and growth.Despite operating in a complex and volatile external environment that has impacted
business performance the bulk commodity supply chain industry faces both challenges and
opportunities. In the context of structural changes across the industrial chain increasing
market concentration is creating new business prospects. Leading bulk supply chain
companies through global network expansion and full-chain resource integration are
poised to seize strategic advantages accelerate the growth of both domestic and
international market share and expedite the restructuring of the industry landscape.For a detailed analysis of industry operations and development trends please refer to
31“Industry Analysis During the Reporting Period”.
2. Development Strategy of the CompanyThe Company adheres to the business philosophy of “Rooted in the Supply Chain Servingthe Industrial Chain Creating the Value Chain” focusing on core industrial chains and key
customers. It continues to strengthen its integrated supply chain service capabilities and
deepen service value. By helping real economy enterprises reduce costs and improve
efficiency ultimately fostering mutual growth with upstream and downstream partners.Under its Sixth Five-Year Strategic Plan the Company adopts “PlatformizationGlobalization and Digitalization” as its strategic direction focusing on enhancing
capabilities in procurement and sales services logistics services and information services
and on unleashing platform potential while stimulating team vitality. The Company pursues
scalable growth and consistent quality improvements through expanding product categories
developing regional markets and providing value-added services advancing steadily
toward its vision of becoming a “world-class supply chain service provider”.The year 2025 marks both the conclusion of the Sixth Five-Year Plan and the launch of the
Seventh. Leveraging the preparation of its next five-year strategic development plan as a
pivotal opportunity the Company will conduct an in-depth analysis of the phase-specific
characteristics in the new era adapt to macroeconomic trends clarify its strategic
positioning and core competitiveness in supply chain operations and intensify efforts in
transformation and innovation mapping out a new blueprint for sustainable development.
3. Business Plan of the Company
For details please refer to “4. Key Business Plans for 2025” in “Management Discussionand Analysis of Business Operation”.
4. Potential Risks
(1) Macroeconomic Uncertainty and Commodity Price Volatility
The world is undergoing accelerated changes unseen in a century with an increasingly
complex and challenging external environment. Rising unilateralism and protectionism
setbacks in multilateral trade systems growing tariff barriers combined with ongoing
32geopolitical tensions—pose multiple risks to global industrial and supply chains. The
international commodity market is experiencing significant price volatility. As the
Company's industry is closely tied to macroeconomic conditions both at home and abroad
fluctuations in the macroeconomy may have a certain impact on the Company’s operating
performance.Response Strategies: The Company actively monitors macroeconomic developments and
industry trends maintains comprehensive oversight of market risks associated with key
commodities and strengthens its analysis of price movements. By utilizing tools such as
spot-futures integration and hedging strategies the Company is enhancing its ability to
proactively manage price risks.
(2) Operational Management Risks
While the long-term positive trajectory of China’s economy remains unchanged the
foundation of current recovery is not yet solid. Weak demand along with operational
difficulties faced by certain enterprises pose significant challenges across the industrial
value chain. Consequently the Company faces operational risks in customer credit
management business models price fluctuations and cargo rights control.Response Strategies: The Company will enhance its intelligent and digitalized operational
management system and further strengthen the separation of “three rights”—namely the
rights to business operations financial management and logistics and cargo management.A multi-pronged approach will be adopted to manage risks effectively including: increasing
the proportion of manufacturing clients while reducing customer concentration (from a
customer perspective); optimizing the product mix (from a commodity perspective);
upgrading business models (from a model perspective); and enhancing the risk
management framework (from a control perspective). In addition to address customer
credit risks the Company will continue to refine its risk control measures enhance
pre-transaction oversight establish robust monitoring mechanisms for key customers
strictly manage high-risk transactions and improve overall operational quality to safeguard
the interests of both the Company and our shareholders.
(3) International Expanding Risks
33Globalization is one of the Company’s core strategic priorities with business partners
spanning over 110 countries and regions. However significant differences in political
economic social and religious environments across regions along with escalating trade
frictions between certain countries may adversely impact the Company’s global expansion
efforts.Response Strategies: The Company will continue to closely monitor changes in host
country policies regulations and international market dynamics timely implementing
early warning and preventive measures to mitigate risks. We will also closely observe
exchange rate trends and reinforce exchange rate risk management through derivative
instruments. In parallel we will strengthen cooperation with centrally-administered
state-owned enterprises and leading corporations with extensive overseas experience
leveraging their platforms to facilitate international operations and mitigate associated
risks.
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