China Merchants to boost dry-bulk ports
CHINA Merchants Holdings (International), owner of stakes in China's five largest container ports, may invest in more dry-bulk terminals because of surging imports of iron ore and coal.
"We are studying China's long-term needs for resources and minerals to see if there is a shortage of bulk terminals," chairman Fu Yuning said in Hong Kong. The company is also planning to invest in more container terminals in China and overseas.
China Merchants has boosted its profit for five years in a row because the country's surging exports of toys, clothes and other goods have created demand for container shipments.
The company plans to increase its investment in bulk terminals because of rising imports of raw materials in China, already the biggest user of steel, rubber, coal and other commodities.
"Bulk is a good business, as China's economic growth will spur domestic trade and demand for bulk cargo shipments," said Paul Chan, who helps manage about $US1.8 billion ($2.1 billion), including China Merchant shares, at Invesco Asia in Hong Kong.
China's coal imports surged 44 per cent in the first five months of the year from a year earlier and steel product exports more than doubled to 27.4 million tons, according to the county's customs agency.
China Merchants and its units, including Shanghai International Port (Group), operate 132 bulk cargo berths. Volume rose 69 per cent last year to 149 million tons. The company's container traffic increased 64 per cent to 40.24 million 20-foot boxes. China Merchants shares rose 1.9 per cent to $HK40 in Hong Kong yesterday.
The stock has gained 25 per cent this year, compared with an 11 per cent rise in the benchmark Hang Seng index.
China Merchants has container terminals in Hong Kong, Shanghai, Shenzhen, Qingdao, Ningbo, Tianjin and Zhangzhou.
It has also agreed to take a 14per cent stake in the 7.27 billion yuan ($1.1 billion) Dachan Bay phase two project in the southern city of Shenzhen. It might also invest in another terminal in the northern city of Tianjin, Mr Fu said.
"The company's ports are well located and are benefiting from the economic growth," South China Securities Hong Kong-based analyst Francis Chu said.
China's container traffic would probably exceed 100 million boxes this year as export growth drove demand, Mr Fu said. Chinese ports handled 93.6 million 20-foot equivalent units last year, more than triple the 2001 tally.
China Merchants may also invest in more ports overseas. Its parent has already agreed to invest in a $US1 billion project led by Vietnam National Shipping Lines to build a deep-water port near Ho Chi Minh City.
"We will explore similar opportunities elsewhere," said Mr Fu, who is also president of China Merchants Group. "I don't mind looking beyond Asia."
"We are studying China's long-term needs for resources and minerals to see if there is a shortage of bulk terminals," chairman Fu Yuning said in Hong Kong. The company is also planning to invest in more container terminals in China and overseas.
China Merchants has boosted its profit for five years in a row because the country's surging exports of toys, clothes and other goods have created demand for container shipments.
The company plans to increase its investment in bulk terminals because of rising imports of raw materials in China, already the biggest user of steel, rubber, coal and other commodities.
"Bulk is a good business, as China's economic growth will spur domestic trade and demand for bulk cargo shipments," said Paul Chan, who helps manage about $US1.8 billion ($2.1 billion), including China Merchant shares, at Invesco Asia in Hong Kong.
China's coal imports surged 44 per cent in the first five months of the year from a year earlier and steel product exports more than doubled to 27.4 million tons, according to the county's customs agency.
China Merchants and its units, including Shanghai International Port (Group), operate 132 bulk cargo berths. Volume rose 69 per cent last year to 149 million tons. The company's container traffic increased 64 per cent to 40.24 million 20-foot boxes. China Merchants shares rose 1.9 per cent to $HK40 in Hong Kong yesterday.
The stock has gained 25 per cent this year, compared with an 11 per cent rise in the benchmark Hang Seng index.
China Merchants has container terminals in Hong Kong, Shanghai, Shenzhen, Qingdao, Ningbo, Tianjin and Zhangzhou.
It has also agreed to take a 14per cent stake in the 7.27 billion yuan ($1.1 billion) Dachan Bay phase two project in the southern city of Shenzhen. It might also invest in another terminal in the northern city of Tianjin, Mr Fu said.
"The company's ports are well located and are benefiting from the economic growth," South China Securities Hong Kong-based analyst Francis Chu said.
China's container traffic would probably exceed 100 million boxes this year as export growth drove demand, Mr Fu said. Chinese ports handled 93.6 million 20-foot equivalent units last year, more than triple the 2001 tally.
China Merchants may also invest in more ports overseas. Its parent has already agreed to invest in a $US1 billion project led by Vietnam National Shipping Lines to build a deep-water port near Ho Chi Minh City.
"We will explore similar opportunities elsewhere," said Mr Fu, who is also president of China Merchants Group. "I don't mind looking beyond Asia."