3Q25 results in line with our expectations

Nanjing Tanker announced its 1–3Q25 results: Revenue fell14.77% YoY to Rmb4.27bn. Net profit attributable toshareholders fell 42.81% YoY to Rmb947mn, implying EPS ofRmb0.20. In 3Q25, revenue rose 1.10% YoY and 7.05% QoQ toRmb1.50bn, and net profit attributable to shareholders fell13.47% YoY but rose 31.97% QoQ to Rmb377mn, in line withour expectations.

The freight rate of refined oil products rose QoQ in 3Q25. Netmargin improved QoQ thanks to rising freight rates. From mid-June to mid-September 2025 (corresponding to the firm’searnings for 3Q25), the average freight rate for the TC7 routewas US$21,863/day (-9.7% YoY and +11.9% QoQ), and thecombined freight rate for MR vessels’ Pacific route wasUS$25,333/day (+0.2% YoY and +19.4% QoQ). Thanks toimproving freight rates, net margin rose 4.8ppt QoQ but fell4.2ppt YoY to 25.2% in 3Q25.

Trends to watch

Since the start of 4Q25, refined oil freight rates in the Asia-Pacific region have declined QoQ but turned positive YoY.

Since October, the combined TC7 and Pacific route rates weredown 12.8% and 13.2% MoM, but up 18.1% and 8.7% YoY. Weexpect freight rates to improve in November–December,supported by the upcoming peak season.

Longer term, MR vessel supply remains relatively tight, with theorderbook representing 14.6% of total capacity—below the 16%share of vessels over 20 years old. In addition, we believetightening sanctions on shadow fleets in Europe and the US willfurther constrain effective MR vessel supply.

The firm announced plans to use its capital reserves tooffset losses in financial statements, subject to shareholder approval at the general meeting. We are optimistic aboutthe firm’s valuation recovery as its dividend-payingcapacity improves.

According to corporate filings, the firm intends to use surplusand capital reserves to eliminate the accumulated deficit in thefinancial statements by end-2024. If approved, this would clearthe path for future dividend distributions. The firm has alsocontinued its share repurchase program, buying back 1.56% ofits outstanding shares as of end-September.

Financials and valuation

We maintain our earnings forecasts and valuations. The stock istrading at 11.4x and 10.0x 2025e and 2026e P/E. We maintainan OUTPERFORM rating and our target price of Rmb3.7,implying 13.4x 2025e and 11.7x 2026e P/E, offering 16.7%upside.

Risks

Geopolitical changes; sharp increase in new vessel orders.