COSCO SHIPPING Development Co., Ltd. — Interim / Quarterly Report 2011

Apr 27, 2011

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.

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock code: 02866)

2011 FIRST QUARTERLY REPORT

In accordance with the applicable rules of the Shanghai Stock Exchange of the People’s Republic of China (“ PRC ”) (being the stock exchange on which the A shares of China Shipping Container Lines Company Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) are listed), the quarterly report (“ Quarterly Report ”) of the Company for the first quarter of 2011 (“ Reporting Period ”) will be published on the Shanghai Stock Exchange on 28 April 2011. The financial information set out in the Quarterly Report was prepared in accordance with the Generally Accepted Accounting Principles of the PRC.

In accordance with the requirement of Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, we have extracted the following price-sensitive information from the Quarterly Report:

§1 BASIC INFORMATION OF THE COMPANY

1.1 Principal financial data and statistics highlights

Currency: RMB

			Increase/decrease
			at the end of
			the Reporting Period
			as compared with
	As at the end of	As at the end of	the end of
	the Reporting Period	previous year	previous year
			(%)
Total assets_(RMB)_	48,334,078,942.94	49,016,125,287.20	-1.39
Owner’s equity
(or shareholders’ equity)(RMB)	28,934,349,202.27	29,184,938,540.38	-0.86
Net assets per share attributable to
equity holders of the company
(RMB/Share)	2.48	2.50	-0.80

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					From	Increase/decrease
				beginning of		as compared with
				the year to end of		the corresponding
				Reporting	Period	period of last year
						(%)
Net cash flow from operating activities_(RMB)_				-210,157,383.11		101.74
Net cash flow per share from operating activities
(RMB/Share)					-0.02	101.74
						Increase/decrease
						of the Reporting
						Period as
				From beginning of		compared with the
				the year to end of		corresponding period
	Reporting	Period		Reporting Period		of last year
						(%)
Net profit attributable to equity holders
of the company_(RMB)_	-146,148,266.97			-146,148,266.97		24.17
Basic earnings per share_(RMB/Share)_		-0.0125			-0.0125	24.17
Basic earnings per share, excluding
extraordinary gains or losses
(RMB/Share)		-0.0152			-0.0152	9.52
Diluted earnings per share
(RMB/Share)		-0.0125			-0.0125	24.17
Weighted average return on						Increased 0.27
net assets (%)			-0.50		-0.50	percentage points
Weighted average return on net assets,
excluding extraordinary						Increased 0.17
gains or losses_(%)_			-0.61		-0.61	percentage points
Excluding extraordinary gains or losses items and amounts:
						Currency: RMB
Items						Amount
Gain/loss from disposal of non-current assets_(RMB)_						32,456,042.51
Government grants recognized in the	income statement for the period
(exclusive of those that are closely	related to	the operation of
the Company and received in a certain amount			or fixed
quantity according to the State standards)(RMB)						5,898,997.85
Other non-operating income/expenses excluding			the items above_(RMB)_			564,073.25
Impact of income tax_(RMB)_						-6,873,767.49
Impact of gains or losses of minority	shareholders (after tax)(RMB)					-319,838.35
Total						31,725,507.77

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1.2 Total number of shareholders at the end of the Reporting Period and the top 10 shareholders of the Company who are not subject to trading moratorium

Unit: share

Total number of shareholders at the end of
the Reporting Period		448,740
Top 10 shareholders of the Company who are not	subject to trading moratorium
	Number of
	shares held at
	the end of the
Name of shareholders (in full)	Reporting Period	Type
China Shipping (Group) Company	5,361,837,500	A Share
HKSCC NOMINEES LIMITED	3,728,337,340	H Share
China Life Insurance (Group) Company Limited –
Traditional – Ordinary Insurance Products
中國人壽保險（集團）公司－傳統－普通保險產品	73,508,632	A Share
China Life Insurance Company Limited – Dividend –
Individual Dividend – 005L – FH002 Shanghai
中國人壽保險股份有限公司－分紅－
個人分紅－005L－FH002滬	45,435,860	A Share
Agricultural Bank of China – Bank of Communications
Schroder Selected Equity Fund
中國農業銀行－交銀施羅德精選股票證券投資基金	32,452,739	A Share
Industrial and Commercial Bank of China –
Bosera Selective Equity Securities Investment Fund
中國工商銀行－博時精選股票證券投資基金	20,471,484	A Share
Bank of China – Harvest Shanghai Shenzhen 300 Index
Securities Investment Fund	12,838,551	A Share
Ping An Life Insurance Company of China –
Traditional – Ordinary Insurance Products
中國平安人壽保險股份有限公司－
傳統－普通保險產品	11,549,877	A Share
Bank of Communications – Tian Zhi Core Value Growth
Stock Securities Investment Fund	11,150,068	A Share
National Social Security Fund 102
全國社保基金一零二組合	10,948,700	A Share

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§2 SIGNIFICANT EVENTS

• 2.1 Particulars of material changes in major accounting items and financial indicators of the Company and reasons

• (1) The increase in inventories by 48.06% at the end of the Reporting Period as compared with the beginning of the Reporting Period was mainly due to the increase in oil prices;

• (2) The decrease in tax payables by 34.74% during the end of the Reporting Period as compared with the beginning of the Reporting Period was mainly due to payment of last year’s tax payables during the Reporting Period;

• (3) The increase in the losses of undistributed profits by 90.25% during the end of the Reporting Period as compared with the beginning of the Reporting Period was mainly due to the significant decrease in the operating profit of the Company during the Reporting Period;

• (4) The increase in business taxes and surcharges by 37.19% during the Reporting Period as compared with the corresponding period of last year was mainly due to the increase in business taxes on container detention charges and management income during the Reporting Period;

• (5) The decrease in finance expenses by 104.15% during the Reporting Period as compared with the corresponding period of last year was mainly due to the decrease in exchange loss;

• (6) The decrease in investment income by 96.62% during the Reporting Period as compared with the corresponding period of last year was due to the gains from disposal of equity interest through the share swap of Port of Yantai undertaken by China Shipping Terminal Development Co., Ltd. (中海碼頭公司) (a subsidiary of the Company) and no such gains was recorded during the Reporting Period;

• (7) The increase in non-operating income by 866.95% during the Reporting Period as compared with the corresponding period of last year was mainly due to the increase in gains from disposal of containers during the Reporting Period;

• (8) The increase in non-operating expenses by 60.67% during the Reporting Period as compared with the corresponding period of last year was mainly due to the increase of charitable donation expenses during the Reporting Period;

• (9) The decrease in income tax expenses by 76.18% during the Reporting Period as compared with the corresponding period of last year was mainly due to the payment of income tax in respect of gains from share swap of Port of Yantai during the corresponding period of last year;

• (10) The increase in gains or losses of minority shareholders by 46.14% during the Reporting Period as compared with the corresponding period of last year was mainly due to the increase in profit generated from investees of minority shareholders;

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• (11) The decrease in other comprehensive income by 391.53% during the Reporting Period as compared with the corresponding period of last year was mainly due to the decrease in movement in exchange fluctuation;

• (12) The decrease in net cash flows from operating activities for the Reporting Period by 101.74% as compared with the corresponding period of last year was mainly due to the decrease in cash income of the Company during the Reporting Period;

• (13) The cash received from investment income during the Reporting Period by 100% as compared with the corresponding period of last year was mainly due to the dividends received from Yingkou New Century Terminal (營口新世紀碼頭), our investee company;

• (14) The increase in net cash received from disposal of fixed assets, intangible assets and other long-term assets by 1,026.57% during the Reporting Period as compared with the corresponding period of last year was mainly due to the income from disposal of containers during the Reporting Period;

• (15) The increase in cash paid for purchase of fixed assets, intangible assets and other long-term assets by 1,466.53% during the Reporting Period as compared with the corresponding period of last year was mainly due to the payment for the construction of large vessels;

• (16) The decrease in cash paid for investment by 100% as compared with the corresponding period of last year during the Reporting Period was mainly due to capital increase conducted for Dalian International Container Terminal Co., Ltd. during the corresponding period of last year;

• (17) The decrease in net cash flows from investing activities for the Reporting Period by 394.36% as compared with the corresponding period of last year was mainly due to the increase in vessel construction and purchase of fixed assets by the Company during the Reporting Period which resulted in the increase of cash outflows from investing activities;

• (18) The decrease in cash received from borrowings by 98.23% during the Reporting Period as compared with the corresponding period of last year was mainly due to the decrease in borrowings during the current period as compared with the corresponding period of last year;

• (19) The decrease in cash paid for repayment of debt by 84.98% during the Reporting Period as compared with the corresponding period of last year was mainly due to the decrease in repayment of bank loans during the Reporting Period;

• (20) The decrease in net cash flows from financing activities for the Reporting Period by 157.20% as compared with the corresponding period of last year was mainly due to the decrease in net borrowings by the Company during the Reporting Period, which resulted in net cash outflows from financing activities during the Reporting Period as compared with net cash inflows from financing activities during the corresponding period of last year; and

• (21) The decrease in the balance of cash and cash equivalents by 865.40% at the end of the Reporting Period as compared with the corresponding period of last year was mainly due to the increase in vessel construction and purchase of fixed assets as well as decrease in cash inflows from operating activities and borrowings during the current period.

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2.2 Status of performance of undertakings by the Company, its shareholders and controlling shareholders

Non-competition undertakings

On 29 August 2007, China Shipping (Group) Company (“ China Shipping ”), the controlling shareholder of the Company has undertaken that (i) it shall, or shall procure the subsidiaries controlled by it, to take all effective steps not to engage in or participate in any business which competes with the container shipping business or related businesses currently carried on by the Company or any subsidiary controlled by the Company, nor to hold any interest or benefit in the said businesses. If there is an opportunity for China Shipping or any subsidiary controlled by it to participate in any container shipping business or related businesses currently principally engaged in by the Company or any subsidiary controlled by it, or in any project in relation to the businesses which the Company or any subsidiary controlled by it shall in the future principally engage in, China Shipping shall, or shall procure the subsidiary controlled by it, to grant to the Company or any subsidiary controlled by it the first opportunity to participate in the said business or project; and (ii)China Shipping will fully indemnify the Company and/or the subsidiaries controlled by the Company against all losses, damages and costs incurred by China Shipping and/or the subsidiaries controlled by it as a result of or arising from any breach of the undertakings set forth above.

During the Reporting Period, China Shipping did not breach any of the undertakings as stated above.

2.3 Implementation of the profit distribution plan during the Reporting Period

The seventh meeting of the third session of the Board was held by the Company on 29 March 2011, during which the Resolution for the 2010 Profit Distribution of the Company was considered and approved. Since the Company recorded a loss in 2009, the accumulated undistributed profits attributed to the Company calculated under PRC accounting standards by the Group as at 31 December 2010 was RMB638 million and combined accumulated undistributed profits was RMB-162 million. In view of the uncertainty about future earnings, as well as increase in capital expenses in 2011, it was proposed that no profit distribution would be made for the year 2010 and no capitalization of capital common reserve fund would be made. The Profit Distribution Plan is subject to review and approval at the 2010 Annual General Meeting of the Company.

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CAUTION STATEMENT

The Board wishes to remind investors that the above extracts from the Quarterly Report is based on the Group’s internal records and management accounts and have not been reviewed or audited by the auditors. Investors are cautioned not to rely unduly on the extracts from the Quarterly Report. In addition, investors are advised to exercise caution when dealing in the shares of the Company.

By order of the Board China Shipping Container Lines Company Limited Li Shaode Chairman

Shanghai, the PRC 27 April 2011

The Board as at the date of this announcement comprises of Mr. Li Shaode, Mr. Zhang Guofa, Mr. Huang Xiaowen and Mr. Zhao Hongzhou, being executive Directors, Mr. Ma Zehua, Mr. Zhang Jianhua, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Yan Zhichong and Mr. Xu Hui, being nonexecutive Directors, and Mr. Jim Poon (also known as Pan Zhanyuan), Mr. Wu Daqi, Mr. Shen Kangchen, Mr. Shen Zhongying and Ms. Zhang Nan being independent non-executive Directors.

• The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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