May 31, 2024 04:29 AM
BUSINESS
China Merchants to Consolidate Cargo Operations Amid Shipping Boom
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Following the Red Sea crisis, extensive rerouting tightened global container shipping supply, leading to sustained increases in freight rates
China’s state-owned conglomerate China Merchants Group is shaking up its subsidiaries to consolidate its container line operations amid a boom in the global shipping industry.
China Merchants Energy Shipping Co. Ltd. (601872.SH), the Shanghai-listed cargo shipping unit of China Merchants Group Ltd., unveiled a plan to spin off its container shipping arm Sinotrans Container Lines Co. Ltd. and car carrier Guangzhou China Merchants RO-RO Transportation Co. Ltd. (CMES RoRo).
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- China Merchants Group is restructuring to consolidate its container line operations by spinning off Sinotrans and CMES RoRo.
- Antong Holdings will acquire controlling stakes in Sinotrans and CMES RoRo, aiming to bolster its transportation capabilities.
- The deal could elevate Antong's container capacity to 128,000 TEU, making it 19th globally, and enhance service coverage in international markets.
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Who’s Who
- China Merchants Group
- China Merchants Group is a state-owned conglomerate in China that is restructuring its subsidiaries to consolidate its container line operations. Its Shanghai-listed unit, China Merchants Energy Shipping, plans to spin off its container and car shipping arms, with Antong Holdings acquiring controlling stakes. This reorganization aims to enhance Antong's capabilities in both domestic and international trade. If approved, Antong's container capacity will reach 128,000 TEU, ranking it 19th globally.
- China Merchants Energy Shipping Co. Ltd.
- China Merchants Energy Shipping Co. Ltd. (601872.SH) is the Shanghai-listed cargo shipping unit of China Merchants Group. It plans to spin off its container shipping arm, Sinotrans Container Lines, and car carrier Guangzhou China Merchants RO-RO Transportation (CMES RoRo). These assets will be acquired by Antong Holdings. Despite the spinoff, it is expected that China Merchants Energy Shipping will regain control of Antong post-consolidation, enhancing its transport capacity for both domestic and international trade.
- Guangzhou China Merchants RO-RO Transportation Co. Ltd.
- Guangzhou China Merchants RO-RO Transportation Co. Ltd. (CMES RoRo) operates a fleet of 22 ro-ro ships capable of transporting 41,000 vehicles. The company has also ordered six additional auto transport ships, including two with 9,300 vehicle spaces and four with 7,800 vehicle spaces, expected for delivery from 2025 to 2027.
- Antong Holdings Co. Ltd.
- Antong Holdings Co. Ltd. (600179.SH) is a container shipping company controlled by China Merchants Group since 2023. It currently focuses on domestic container shipping services and has the third largest capacity in China. Following the planned acquisition of Sinotrans and CMES RoRo, Antong's total container capacity is expected to reach 128,000 TEU, ranking it 19th globally. The consolidation aims to expand its service coverage to Southeast Asia, Australia, New Zealand, and the Middle East.
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What Happened When
- 2023：
- China Merchants Group took control of Antong Holdings Co. Ltd. (600179.SH).
- 2023：
- Sinotrans Container Lines Co. Ltd. posted 870 million yuan ($120 million) in net profits.
- First quarter of 2024：
- Sinotrans Container Lines Co. Ltd. posted 104 million yuan in net profits.
- 2024：
- China Merchants Group announced it would consolidate its container line operations amid a boom in the global shipping industry.
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