The company has more than ten years of experience in maritime shipping, with a long-term focus on Atlantic routes. As the shipping industry matures, cyclical fluctuations in the industry have become a risk that cannot be ignored. In response to this challenge, we actively seek new growth opportunities to offset the declining cyclical fluctuations in shipping. We believe the maritime environment holds immense commercial potential, which led us to conceive the idea of transforming ships into highly efficient ocean factories.
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I believe that corporate values are critical as they are the driving force behind the sustainable growth and success of a business. The core values of Intercont Group are innovation. As an environmentally friendly, tech-driven company with an innovative business model, our creative thinking motivates us to constantly improve and enhance efficiency. Additionally, the pursuit of excellence is a key component of our corporate culture. We are committed to setting and exceeding higher standards, continually challenging ourselves to achieve breakthroughs. Equally important is the ability for continuous learning. We encourage our team members to actively embrace new knowledge and skills, ensuring that through constant learning and growth, we remain competitive, seize the future, and adapt to the rapidly changing market.
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When recruiting members for the management team, we particularly emphasize candidates' innovative talents, especially in technological innovation and business model innovation. These two types of innovation are not only the fundamental driving forces for the company's development but also the core motivation guiding us steadily towards our goals.
As the company's direction became clearer, we gathered a group of experts from various industries, including shipbuilding, pulp production, pulp procurement operations, automation production line design, as well as ship engineering machinery and ship software control. These experts form the strong backbone of the pulping factory ship project and have become the vital force driving the realization of the company's strategic vision.
I hope our team is made up of individuals who are bold in innovation and willing to take risks. I believe that when a person has enough courage, they will never regret their actions. Only those filled with courage can seize the future and embrace opportunities.
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The company is divided into two main business fields: traditional vessel rental and innovative seaborne pulping business.
Our traditional business focuses on vessel rental and vessel management services. We manage and control four vessels, including two 48,500 DWT vessels, one 56,000 DWT vessel, and one 63,000 DWT vessel.
Based on our understanding of the maritime business model, we have innovatively developed onboard pulping manufacturing technologies, making full use of the time and space during navigation to address the high pollution and unstable supply issues associated with traditional pulp raw materials. In the future, the company plans to further innovate in sustainable maritime business model, committed to providing integrated maritime ESG solutions.
Firstly, with the implementation of climate change and sustainable development strategies, countries are gradually raising their requirements for carbon emissions and sustainable economies. Based on this background, we have deeply considered the ESG model for maritime shipping and are exploring innovative technologies to diversify ocean industries and create new business opportunities.
Most importantly, ESG practices enable companies to make positive contributions to environmental and social responsibility, thereby contributing to human sustainable development.
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In selecting specific industrial directions, we have explored various business models and ultimately focused on the recycled pulp industry. Based on authoritative industry research data and the demand in the pulp industry across Asia, including China, we have conducted in-depth analysis and forecasts. We believe that the cross-border e-commerce and international logistics industries will continue to experience high growth in the coming years, driving sustained rapid demand for packaging paper. As an intermediate link, the supply of pulp is expected to remain insufficient to meet demand. To seize this industry opportunity, our business model must address the following key aspects. Firstly, overcoming barriers related to technology, environmental protection, certification, and equipment for onboard pulping. Secondary, establishing long-term strategic partnerships with B-end paper manufacturers. Thirdly, securing a stable supply of raw materials for recycled circular packaging paper.
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In selecting the specific industrial direction, we undertook extensive exploration of various business models. Based on data reports from authoritative industry research institutions, we observed that the rapid growth of cross-border e-commerce and international logistics has significantly driven the global demand for packaging paper. Pulp, especially high-quality pulp, serves as an intermediate link in the industrial chain and is a relatively scarce manufacturing raw materials worldwide.
The core advantages of the seaborne pulping business with factory ships lie in its asset-light nature and highly efficient automated production capability. Unlike traditional land-based paper mills, this model avoids costs associated with land, factory construction, and raw material transportation. This results in reduced capital investment pressures and greater flexibility in capacity expansion. Moreover, during project operations, we closely collaborate with ship owners and utilize core patented technologies authorized by the Intercont Group. The ship owners invest in ship acquisition and retrofitting, effectively reducing the company's pressure during the capital expansion phase and ensuring stable returns for ship owners in the industry. This partnership facilitates the rapid replication of our business model and accelerates commercialization.
Another standout feature is the automated production line, which not only greatly reduces labor costs but also ensures precision and efficiency during the production process. To meet legal requirements for maritime safety, our "low-manning" strategy initially reduces workforce demand by two-thirds compared to traditional factories, with the goal of gradually transitioning to "unmanned" operations.
As an intermediate link in the production of corrugated containers, the upstream supply of raw materials is stable, while downstream demand is strong and has long been in a state of supply shortage. We believe this is a stable and opportunity-filled track.
As an intermediate link in the paper industry, we plan to participate in the in the market as complementary role. by providing stable and high-quality pulp supplies to large paper factories in Chinese mainland and surrounding areas, becoming a key supplementary source of raw materials for these factories.
At the same time, we will continuously expand our business with small and medium-sized paper companies, offering better choices in terms of quality and price. Furthermore, as a practitioner of cross-industry business models, INTERCONT is actively engaging in exchanges and learning from leading global paper companies, driving innovation and upgrading our products. We share knowledge and experience with our clients, exploring and breaking through barriers together, while driving the continuous advancement and prosperity of the industry.
Moreover, our solid and trust-based strategic partnerships with large B2B clients will primarily built on effective capacity supplementation, deep integration with downstream clients, demand exploration, and continuous product optimization.
Initially, seaborne pulping was nothing more than a bold concept on paper. However, we systematically worked to validate its feasibility from various perspectives, including ship design, certification acquisition, propulsion system upgrades, exploration of clean energy utilization, development of new equipment, and construction of intelligent production lines. As these challenges were tackled one by one, the project is expected to evolve gradually from a mere concept into a tangible reality.
Firstly, our Intercont Group has over 10 years of experience in vessel rental and vessel management services, navigating through multiple cycles of highs and lows in the maritime shipping industry, accumulating extensive expertise. The company's annual revenue in fiscal years 2022 and 2023 is more than $30 million; in fiscal year 2024, the annual revenue is more than $25 million. The average annual gross profit margin in these three fiscal years is about 30%. Leveraging our foundational experience in shipping, and guided by ESG principles, we have expanded into seaborne pulping operation, aiming to mitigate the cyclical risks inherent in traditional shipping operations and provide strong support for our revenue structure.
The success of the seaborne pulping business with factory ships represents the best attempt at validating the "ocean factory" model and serves as the strongest proof of its potential for sustainable development. Currently, we are focused on the implementation of the seaborne pulping business with factory ships. In the future, we will continue to explore more maritime scenarios, aiming to impart the time-space value contained in the vast oceans for all of humanity.
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We plan to establish in-depth partnerships with pre-storage and environmental recycling companies in the United States. This initiative will ensure a stable supply of recycled resources and effectively integrates wastepaper resources such as AOCC13 and AOCC12 to guarantee a smooth supply of raw materials. At the same time, we want to expand our efforts to source wastepaper resources from countries other than the United States, providing a stable and abundant supply of raw materials for future business development.
We have made significant efforts in achieving near-zero carbon emissions and improving energy utilization. Firstly, we will implement a carbon footprint management plan, analyzing and calculating the full lifecycle and carbon emissions of our products. We have also partnered with Rockwell, a global Fortune 500 company based in the United States, to explore new paths for the industrialization of ESG principles and carbon neutrality.
Secondly, we will work with suppliers to advance the development of a green supply chain, ensuring that raw materials and production processes strictly comply with environmental standards, thus driving the entire industry chain toward green transformation.
Additionally, we have adopted advanced dry pulping technology, which significantly reduces water consumption compared to traditional wet pulping and eliminates the need for chemical additives in the production process. Therefore, there is expected to be near-zero emissions of waste water, waste gas, and solid waste during pulping process, and realize the environmentally friendly manufacturing.
At the same time, we are actively investing in research and development of environmental protection technologies, such as carbon capture and storage, converting waste into usable energy, and promoting resource recycling. Through these efforts, we are not only protecting the environment and making significant contributions to it, but we are also laying a solid foundation for the company's sustainable development.
It is definitely a good thing. The ocean, as a carrier linking the world, is an essential element for connecting all entities. Compliance with international conventions and safety standards is crucial. Our years of deep involvement in the maritime shipping industry have allowed us to fully understand industry regulations, and we are also actively responding to the increasingly changing environmental protection requirements within the industry.
We are bold to be a pioneer in maritime ESG, continuously making new ESG transformations and breakthroughs in the traditional shipping field, and exploring new pathways and growth curves that align with maritime ESG. Therefore, the strengthening of environmental protection policies is beneficial for us.
At the same time, as explorers of maritime ESG, we are excited to share our experiences and insights with others in the ESG field, working together to promote industry progress.
Regarding the legal regulations issues of multinational production, we have fully integrated and referenced the legal regulations of relevant countries in ship design, renovation, and business operations. We have also actively engaged in exploration and communication with local governments and relevant departments, developing an operational model that complies with the legal regulations of each country, ensuring the smooth operation of our business.
The entire IPO process for Intercont Group went smoothly, largely due to our strict adherence to standardized management, consistent transparency in information disclosure, and continued focus on building risk control processes. Thanks to this cautious approach, our core business has been stable and solid over the years, and the transition from our core business to the second growth curve has been seamless.
We are aware that long-term development requires not only a stable core business but also continuous growth in the second curve. The IPO is just the beginning, and sustainable growth relies on ongoing advancements in technological innovation and factory ship research and development. To turn the limitations of traditional industries into opportunities, we continuously push the boundaries of knowledge, break conventions, and explore the unknown. This process requires breakthroughs not only in technology but also in thinking and strategy to transform and upgrade our business model. As we enter new fields, we need to overcome challenges in technology, operations, and the supply chain, each of which demands significant effort. Fortunately, along the way, we've encountered many excellent people who share our vision and dreams, and as long as we stay on the right path, we believe success will come. Through collective wisdom, many challenges that initially seemed difficult have been overcome one by one.
I believe that whether it's deepening our effort on maritime environments or implementing the industrialization of ESG, we should not limit ourselves to a specific region or country. Our goal is to position ourselves globally and look toward a broader horizon. My ambition is to become a globally influential emerging maritime ESG enterprise, gaining the resonance and public attention of humanity on environmental protection and sustainable development issues.
At the same time, we are committed to continually strengthening our company's capabilities, focusing on our mission, and striving to become a global leader in emerging carbon neutrality.
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The Maritime shipping industry is a mature and stable industry with significant cyclicality. It is heavily influenced by the global economy and international trade. Additionally, the updating and obsolescence of ship equipment and policy-driven factors are also major contributors to the industry's fluctuations. Long-term growth and profitability in the maritime shipping business largely depend on refined management and a deep understanding of the industry's cycles.
The dual-business model of Intercont Group, combining maritime shipping and seaborne pulping business with factory ships, helps balance and hedge industry risks. It changes the traditional cyclic nature of maritime shipping, making the group's cash flow more stable and its ability to withstand cycles stronger. In the future, our traditional maritime shipping business will continue to pursue refined management for more stable growth. The seaborne pulping business with factory ships will continue to enhance technological and environmental aspects, optimizing both in terms of technology and operations, gradually improving profit margins while creating greater social and economic value.
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Seaborne pulping with factory ships can provide an important supplementary source for paper manufacturing companies, supporting the long-term healthy development of the packaging paper industry. The main growth drivers of the pulping business come from the demand for downstream packaging paper products, including daily consumer goods, electronics, and the booming global online shopping and urban express logistics sectors. The waste import bans introduced by countries such as Japan, China, and other Asian nations have created shortage in raw material supply for downstream paper factories. INTERCONT's innovative business model of onboard pulping will provide a stable supply for downstream paper companies.
In the coming years, the group's business will continue to progress and expand according to the established plan. As the number of pulp vessels increases and voyages grow, the pulping production lines will gradually expand our scale.
There definitely has been, because time and energy are limited. However, I believe that if you explore the length and breadth of life, the goal of life remains the same. Family, life, and the values you want to pursue are actually aligned.
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When you're with INTERCONT or with me, you will witness miracles.
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Don't be afraid to start from zero. Every day is a new beginning. In 2016, for various reasons, I had to start over completely. I lost everything—house, car, money—everything. But in China, it seemed like I never feared it. I didn't fear it. I believe that as long as I'm here, everyone else is too. Similarly, with Intercont Group, I believe that as long as I'm here, this company will endure.
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