Annual Report 2023

Management Discussion and Analysis CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 14 Asia region achieved throughput of 53.54 million TEUs, up 1.9% year-on-year; and ports in Europe and North America regions achieved throughput of 19.70 million TEUs and 18.00 million TEUs respectively, representing year-on-year declines of 7.1% and 20.2%. Benefiting from the overall upturn in China’s economic performance, the economy-driven trade effect continued, foreign trade imports and exports improved steadily while improving in quality, and the port business in Mainland China maintained its leading position in global growth. According to the data from the National Bureau of Statistics, the accumulated container throughput of 310.34 million TEUs, representing a year-on-year increase of 4.9% and accumulated cargo throughput of 17 billion tonnes, representing a year-on-year increase of 8.2% handled by ports in Mainland China in 2023. BUSINESS STRATEGY DEPLOYMENT In 2023, the Group adhered to the general principle of seeking progress while maintaining stability. It focused on “endogenous growth”, accelerated “innovation and upgrade”, and steadily improved quality of production and operation, and focused on the eight major aspects, including homebase port construction, overseas business, comprehensive development, innovative development, capital operation, operation and management, marketing and commerce, environmental, social and governance (“ ESG ”) construction. During the year, there were four highlights on the Group’s business operation. First, the Group’s overseas expansion achieved fruitful results. The key project of “cultivation in Southeast Asia” went ahead to acquire 51% equity interest in PT Nusantara Pelabuhan Handal Tbk (“ NPH ”) in Indonesia. In addition, the Group invested in the building of South Asia Commercial Logistics Hub to further enhance the core competitiveness of its overseas homebase port. Second, the Group’s domestic and overseas homebase ports further consolidated their regional positions with increasing market share, and Hambantota International Port Group (Private) Limited (“ HIPG ”)’s RORO and oil and gas business achieved breakthrough growth. Third, smart technology achieved new advancement. The container terminal operating system (“ CTOS ”) was upgraded to version 5.0, serving 15 customers in 6 countries, and its influence continued to boost. “CM ePort” achieved full coverage of the Group’s controlled port terminals in Mainland China and provided customers with one-stop smart services. The Smart Management Platform (“ SMP ”) has successfully won the Grand Prize of the Science and Technology Progress Award in 2023 by China Ports and Harbours Association. Fourth, the Group’s ESG rating has been upgraded. MSCI, an international authoritative ESG index institution, upgraded the Group’s rating to “BB”, which represent a two-notch upgrade. The Group was honored with the “Best Listed Company for ESG Practice” in the 13th Hong Kong International Finance Forum and the Hong Kong ESG List Annual Assessment Ceremony in 2023 and the “Industry Champions of the Year” in the 2023 Asia Corporate Excellence & Sustainability Awards. As for homebase port construction, the business volume of the Group’s West Shenzhen homebase port increased steadily. The market share of container throughput in foreign trade in the Guangdong-Hong Kong-Macao Greater Bay Area (the “ Greater Bay Area ”) hit a record high, outperforming the overall regional level. In addition, the coordinated ports model in the Greater Bay Area has been continuously promoted to other regions, which efficiently facilitated the coordinated port system of the West Shenzhen Port Zone – inland river terminals, and built the functional integration of the coordinated port blockchain platform and the Pearl River Delta barge dispatch platform, greatly expediting the trade and logistics convenience of the Greater Bay Area. In 2023, the Group set up a total of 30 locations under its coordinated port model, further strengthening the multi-dimensional business synergy alliance with the West Shenzhen homebase port as the core. Sri Lanka homebase port continued to carry out the construction of an international shipping center in South Asia. Colombo International Container Terminals Limited (“ CICT ”) continuously optimized its route layout, focusing on the volume of origin and destination containers and consolidating its fundamental feature, and its market share in the origin and destination containers reached a record high. HIPG continued to improve its core competitiveness, consolidated the fundamental feature of the RORO business, actively explored the value-added services for the RORO business, and achieved new breakthroughs in the refueling of ships on the main routes and a record high in the business of RORO and fuel oil.