Guolian Minsheng Securities: The overall performance of the ship leasing market is stable and improving, with various types of ship rentals expected to see significant differentiation.

Guolian Minsheng Securities released a research report stating that overall, the current ship leasing market is stable and improving, with more differences reflecting on the type of vessels. In the long run, dry bulk carriers and feeder vessels are expected to perform well in terms of rent, while oil tanker rents continue to improve in the short term, and large container ship rents may come under pressure. The significant differentiation of vessel types will require higher professional capabilities from ship leasing companies, and the overall fleet structure is expected to become an important determinant of the future performance of companies, therefore, shipyards closer to the industry or leasing companies may benefit more. It is recommended to pay attention to the ship leasing industry and companies with stronger professional capabilities in the industry. The main points of Guolian Minsheng Securities are as follows: Dry bulk ship rents are expected to maintain high levels of prosperity for a long time As of the end of May 2026, the global dry bulk ship order book/existing fleet is at 13.42%, up by 1.16% from the end of 2025. However, in absolute terms, the current dry bulk ship order book/existing fleet is at the 53rd percentile since 1996. From the supply side, the annual delivery volume is expected to be around 40 million deadweight tons from 2026 to 2028, accounting for less than 5% of the current overall fleet capacity. From the demand side, on the one hand, the fast-growing production in the West Mangdudu is expected to reach 1.2 billion tons annually in the future, and China's extended distance of importing coal from the West Mangdudu as compared to Australia will drive the overall demand for capacity; on the other hand, the conflict between the US and Iran has limited the import of natural gas from Japan and South Korea, which has led to an increase in the emphasis on coal demand and energy security, resulting in additional demand for coal transport capacity. With limited supply elasticity, demand for capacity continues to grow significantly, and we expect dry bulk ship rental performance to be good. Container ship rents are under pressure overall, with potential upside in feeder ship rents For container ships overall, as of the end of May 2026, the order/fleet ratio for container ships reached 38.20%, up by 10.21% from the end of 2024, the highest level since 2010. Container ship rental may be under pressure overall, but there is expected to be significant differentiation within the sector, as 79.75% of the order book consists of large ships with over 8,000 TEU, while small ships with less than 3,000 TEU account for only 6.31%. Looking at deliveries from 2026 to 2030, the average proportion of new container ships with over 8,000 TEU is 77.43%, while feeder container ships account for only 6.14%. In this context, large container ships may face a significant reversal in supply and demand, with overall rental levels likely to come under pressure. Looking at feeder ships, their overall capacity has been squeezed by large container ships in the past, resulting in low overall order and delivery proportions. In the current global environment, trade is gradually becoming more fragmented, leading to a significant increase in demand for feeder ships. From the first five months of 2026, the proportion of new orders for feeder container ships has increased from 9.64% in 2025 to 11.84%. Additionally, the average age of feeder ships is currently high, with the average age of 100-2999 TEU and 3000-5999 TEU ships at 15.56 and 16.15 years respectively as of the end of May 2026. Coupled with environmental constraints and other factors, there will be strong support for the future demand for feeder ships, thereby forming a strong support for feeder ship rents. Short-term tanker rental performance is expected to be good, with some uncertainty in the medium to long term Since 2023, new orders for tankers have been increasing, with new orders in the first five months of 2026 totaling 54.1497 million deadweight tons, exceeding the total for the whole of 2025 by 470.92%. As of the end of May 2026, the tanker order book reached 169 million deadweight tons, up by 34.22% since the beginning of the year, with the order book/fleet ratio reaching 23.18%, up by 5.67% from the end of 2025. In the short term, one of the main supporting factors for tanker rental is that new orders from recent years still need time to be delivered, with limited supply increases in the short term. It is expected that 42.6486 million deadweight tons will be delivered in 2026, accounting for 6.13% of the overall tanker capacity as of the end of May 2026. Secondly, the proportion of sanctioned tankers continues to increase, with 443 crude oil tankers and 526 product tankers sanctioned as of the end of May 2026, accounting for 19.86% and 10.19% of the overall fleet respectively, an increase of 11.40% and 7.24% respectively from the end of 2024, reducing actual capacity. Thirdly, due to the conflict between the US and Iran, some tankers are stranded in the Persian Gulf, with 3,207 vessels still stranded as of May 21, 2026, including 108 crude oil tankers and 175 product tankers, accounting for 6% and 3% of the overall fleet respectively. Additionally, there are 25 crude oil tankers and 75 product tankers waiting outside the Persian Gulf, accounting for 1% each of the overall fleet. There is uncertainty in the medium to long term with recent orders to be delivered. Risk warning: Geopolitical conflicts, downward rent, interest rate risks.