Good News on Listing | Frost & Sullivan Assists CBL International Limited in Successful US Listing (NASDAQ:BANL)

CBL International Limited (hereinafter referred to as "CBL") successfully listed on March 23, 2023, issuing 3,325,000 common shares at a price of $4.00 per share, raising approximately $13.3 million.

During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, sponsor, and other professional intermediary institutions in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer complete communication with the SEC and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on relevant SEC issues regarding the industry.

The company is a mature fuel supply intermediary based in Hong Kong, with a wide geographical and strategic business network covering major Asia-Pacific countries such as China, Hong Kong, and Malaysia, and providing comprehensive turnkey solutions for global ship operators;

The company leverages the capabilities of its regional network to continuously expand its geographical scope, conducting more business in major countries in the Asia-Pacific region, operating at 24 major ports, and will develop to more ports in the future;

The company has established long-term and stable business relationships with the world's top ten international container liner operators.

According to a Frost & Sullivan report

The company's container liner operator customers accounted for approximately 84.6% of the global container fleet capacity in 2021.

Ship fuel refers to the fuel used by ships and is a necessary raw material for ship operation and full voyages. Generally, ship fuel is burned in the furnaces or boilers on board ships to generate heat and power to drive engines. Due to the specific performance indicators required for combustion and engine systems, specific specifications need to be formulated based on standards such as ship tonnage, load capacity, propulsion system, and steam turbine system. Fuel supply is the process of supplying ship fuel to various ships, involving the logistics of loading fuel on board. The supply and distribution of ship fuel are carried out through fuel barges. Ship fuel supply intermediaries aim to coordinate the refueling process of ships, including but not limited to purchasing, supplying, and delivering ship fuel.

The value chain of fuel supply includes different suppliers, such as traders and local actual distributors. Refineries and transporters respectively undertake the roles of producing and transporting residues from crude oil refining, participating in (i) mixing residues with other raw materials and petroleum to convert them into ship fuel oil that meets international standards such as ISO 8216 and ISO 8217, which specify the categories and detailed specifications of ship fuel, and (ii) storing ship fuel. Local actual distributors handle the actual transfer of ship fuel to ships according to the requirements of refiners and/or ship operators.

Ship fuel supply is very important for container liners operating on regular voyages. Container liners need to refuel in different ports in a timely and effective manner, often simultaneously with the loading and unloading of containers, to avoid affecting the planned shipping schedule due to refueling delays or insufficient ship fuel.

In addition, considering infrastructure limitations and different geographical locations during ship voyages, ship fuel supply is planned and arranged before container liners arrive. In addition to finding local ship fuel suppliers at different ports, container liners may also encounter other difficulties during the refueling process, such as transactions and other administrative issues.

The positioning of ship fuel supply intermediaries is to connect both the supply and demand sides of ship fuel within the industry, accounting for more than 60% of the ship fuel supply in the Asia-Pacific region. Compared with local physical distributors, international container liner companies tend to choose ship fuel supply intermediaries for reasons including reducing administrative burdens and time costs, being able to purchase and obtain quotes from different local physical distributors at multiple locations, and ship fuel supply intermediaries also providing credit terms and value-added services.

Ship fuel supply intermediaries support the daily operations of international container liner companies, which involves detailed plans related to ship voyages, especially the availability of ports and refueling stations along the route, the estimated quantity of ship fuel required at each refueling station, and fuel prices.

In addition, without the assistance of fuel suppliers, international container liner companies would need to coordinate with numerous local physical distributors and traders at different ports for price comparisons and arrange physical deliveries, which is time-consuming and inefficient. Ship fuel supply intermediaries are in a favorable position to help ship operators refuel their ships at competitive market prices at appropriate ports without having to establish their own procurement network.

Forecast of Ship Fuel Consumption in the Asia-Pacific Region from 2016 to 2026

Forecast of Ship Fuel Consumption in the Asia-Pacific Region from 2016 to 2026

• The Growth of Maritime Trade

The Asia-Pacific region has always benefited from the growth of maritime trade. According to data from the Organization for Economic Co-operation and Development (OECD), maritime trade accounts for 90% of global trade goods, while according to data from the United Nations Conference on Trade and Development, the total loading and unloading volume of maritime goods in Asia increased from 9.9956 billion tons in 2015 to 11.3606 billion tons in 2020, with a compound annual growth rate of about 2.6%. In 2020, Asia accounted for approximately 53.3% of global cargo loading and unloading volume, with about 65.5% of global goods unloaded at Asian ports. In addition, the strengthening cooperation and partnership among Asian countries including South Korea and China under the Trans-Pacific Partnership Agreement (TPP) will surely promote maritime trade and fuel supply demand in the Asia-Pacific region.

• Supportive Government Policies

Major maritime trading countries such as China and Singapore have given great support in terms of monetary funds, technical support, and auxiliary infrastructure. In China, given that low-sulfur ship fuel has not been included in China's general trade duty-free list, consumption tax and value-added tax have led to high production costs for domestic refineries. The government has implemented tax incentives across the country for these domestic refineries to promote their domestic production and export of low-sulfur ship fuel, facilitate the scale expansion of these domestic companies, help increase domestic supply of ship fuel, and make Chinese ship fuel prices more competitive compared with other ports outside China.

According to China's commitment to the Regional Comprehensive Economic Partnership at the end of 2020, the potential growth in container throughput is expected to drive fuel supply demand. In Singapore, given the outbreak of COVID-19, the government introduced approximately $42 billion as relief measures to maintain the refueling business. The Singapore government has also been actively updating refueling standards such as the SS660 in 2020, which will minimize uncertainties and disputes in refueling operations and win market confidence in refueling operations in the region.

Frost & Sullivan has rich research experience in the transportation industry and has assisted well-known enterprises in successfully listing on the capital market. Successful listing cases include: DBS Bank (2418.HK), Kuaidou Dianzi (2246.HK), Cangang Railway (2169.HK), YGMZ.NASDAQ, Asia Express (8620.HK), InfinityL&T (1442.HK), Xiangxing International (8157.HK), CSSC Leasing (3877.HK), Chengdu High-Speed (1785.HK), Huazhi International (2258.HK), Wanli Da (8482.HK), Qilu High-Speed (1576.HK), Asia Industry (1737.HK), Jun'ao Holdings (8035.HK).