Interim Report 2023

Management Discussion and Analysis 12 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED Strategic deployments in the ports operation In the first half of 2023, the Group constantly adhered to the general principle of seeking progress while maintaining stability. It took initiatives to respond to the global economic downturn and shrinking demand, persistently focused on “endogenous growth” and “innovation and upgrade”, captured the opportunities amidst the complex economic and trade landscape and fully implemented the development measures to ride through the roughness and retain growth. The quality and efficiency were improved to promote development while steadily supporting world- class and high-quality construction. The Group achieved the following operational outcomes in seven key aspects, namely the development of homebase ports, overseas business, comprehensive development, innovative development, capital operation, operation management, as well as marketing and commerce. There were three highlights in the Group’s business operation. Firstly, despite a slowdown in global trade growth, the production and operation of the Group showed a trend of steady progress with prospects of improvement. The two homebase ports in West Shenzhen Port Zone and Sri Lanka continued to strengthen their regional positions, while the overseas homebase port in Sri Lanka extended the business value chain. Secondly, the Group’s comprehensive service platform, namely “CM ePort 3.0”, was officially launched in some ports and terminals and was in sound operation. The Group would continue to expand the scope of online services and continuously improve the comprehensive port service level in the future. Thirdly, the Group actively improved the customer service quality, promoted innovative business model, and strived for further increase in market share so as to strengthen its regional market position. As for homebase port construction, owing to the decline in overall container throughput in the Guangdong-Hong Kong-Macao Greater Bay Area (the “ Greater Bay Area ”), the West Shenzhen homebase port consolidated and further increased its foreign trade market share by adjusting its competitive strategy. While continuing to promote the upgrading of its hardware of the transportation and distribution infrastructure, the West Shenzhen homebase port achieved the trial run of 200,000-tonne vessel night navigation of Tonggu Channel. Sri Lanka’s homebase port continued to carry out the construction of an international shipping centre in South Asia. CICT continuously optimised its route layout, with a steady increase in market share in Colombo and continued to maintain its dominant position. It steadily promoted the project of South Asia Commercial and Logistics Hub and forged the unique competitiveness of providing comprehensive services with a view to create a new development momentum of “port + logistics centre”. HIPG strengthened the market expansion with the transshipment business such as roll-on and roll-off, liquefied petroleum gas and fuel oil recorded higher growth. The Group optimized operation model through strengthening market expansion and improving communication with customers. Regarding overseas business, the Group kept abreast of changes in the global economy and trade environment, stayed in line with the trends in the port and shipping logistics industry, stabilized the existing overseas business, and actively explored the business expansion in Southeast Asia and further improved the global port network layout by leveraging the promising outlook brought by Regional Comprehensive Economic Partnership (RCEP). In terms of innovative development, regarding the digital system, the Group increased investment in scientific and technological research and development, steadily implemented the major task of upgrading the “CTOS” structure of the container terminal operating system of the Ministry of Transport, continued to optimise the technology solution of automated driving hybrid, accelerated the product research and development and promotion coverage of the “China Merchants ePort 3.0” comprehensive service platform, and continuously promoted the management downward of the Smart Management Platform (“ SMP ”). In the first half of 2023, the “5G Mawan Smart Port Project” was selected as the first batch of pilot application excellent cases and solutions in Shenzhen. On 12 August 2023, China Merchants International Technology Company Limited, an