Southern Holdings Group (Hainan) Co., Ltd. relies on the policy advantages of Hainan Free Trade Port, such as zero tariffs, bonded warehousing, and free and convenient cross-border trade, to deeply deploy the import business of EN590 ultra-low sulfur diesel. It has built a full-chain supply system with core components including direct procurement from international refineries, intelligent logistics networks, and customized terminal services. As a strategic hub connecting high-quality resources in Central Asia and Europe with the Asia-Pacific market, the company imports over 300,000 tons annually, covering South China, East China, and Southeast Asia, and has formed closed-loop service capabilities of "resource locking - bonded warehousing - multimodal transport - precise delivery".  

I. Strategic Resource Layout and Business Model  

Upstream Resource Coordination  

Established long-term agreement + spot dynamic procurement mechanisms with international refineries such as Kazakhstan National Petroleum Corporation and Russia's Lukoil, locking in an annual agreement volume of 200,000 tons. Relying on the geographical cost advantages of Kazakhstan refineries, the sulfur content of EN590 diesel produced is stably controlled below 10ppm, with FOB prices approximately 15% lower than similar European products.  

Hedged price volatility risks through crude oil futures hedging, achieving a hedging coverage rate of 70% via the Singapore paper market in 2024.  

Bonded Warehousing Network  

Operates an 80,000 cubic meter intelligent bonded oil storage terminal in the bonded port area, equipped with fully automated temperature control systems, oil-gas recovery devices, and a blockchain traceability platform to achieve "one tank, one code" full-process monitoring.  

Through the bonded warehousing model, imported EN590 can temporarily exempt tariffs, significantly reducing capital occupation costs. In March 2025, the company completed the first 50,000-ton bonded warehousing of Kazakhstan EN590 diesel, improving inventory turnover efficiency by 30%.  

Multimodal Transport System  

Built a three-dimensional logistics network of "sea transport + pipeline transport + railway + road":  

 Sea transport: Launched direct shipping routes in cooperation with COSCO Shipping, with single-vessel capacity reaching 100,000 tons and transportation costs 12% lower than traditional routes;  

Rail transport: Utilizes dedicated railway freight lines to reach terminal markets directly, with transportation efficiency 40% faster than road transport;  

Land transport: Owns a fleet of 200 hazardous chemical vehicles covering domestic regions, providing "door-to-door" precise delivery services.  

II. Core Competitive Advantages  

Policy Empowerment and Cost Advantages  

Leverages the Hainan Free Trade Port policy of "open first line, controlled second line", with comprehensive EN590 import costs 10%-15% lower than those on the Chinese mainland. After the full closure operation in 2025, the company plans to expand entrepot trade, targeting monthly export volumes exceeding 100,000 tons, and further enhancing profit margins through the policy of "tax exemption for processing value-added exceeding 30%".  

Digital Operation Capability  

Independently developed an intelligent oil products supply chain platform integrating functions such as supply-demand matching, online bidding, logistics tracking, and financial services. The platform accesses regulatory data from customs, maritime authorities, etc., realizing fully online import customs clearance and inspection and quarantine processes, with customs clearance efficiency improved by 50%. In 2024, the platform facilitated transaction volumes of 150,000 tons.  

Flexible Customized Services  

Customer segmentation: Provides "price-locking and guaranteed supply" services for shipping enterprises to lock in price fluctuations within 3 months; designs "payment by volume" plans for downstream customers to reduce advance payment pressures;  

Product innovation: Launched the "bonded diesel storage and delivery" service, allowing customers to flexibly allocate domestic and foreign resources as needed;  

Value-added services: Jointly launched the "Oil Trade Connect" supply chain financial product with banks to provide low-interest financing for small and medium-sized customers.  

III. Development Status and Future Plans  

Market Scale  

Achieved revenue of 2.8 billion yuan in 2024, a year-on-year increase of 35%; covered China and 3 Southeast Asian countries, with over 300 terminal customers.  

Policy Opportunities  

Benefiting from the Hainan Free Trade Port's "processing value-added tax exemption" policy, plans to carry out EN590 blending operations in 2025 to enhance product value-added.  

IV. Qualifications and Compliance System  

Core qualifications: Holds a hazardous chemicals business license, customs AEO advanced certification enterprise qualification, and has passed ISO9001 quality management system certification;  

Compliance management: Established a "five-in-one" risk control system (resource procurement, warehousing logistics, transaction settlement, safety and environmental protection, legal compliance).