China National Aviation Corp has spent $56 million to take a 20 per cent stake in China Aviation Express Delivery, a mainland express delivery company. The courier firm is owned by several mainland airlines, including China Eastern Airlines and China Southern Airlines, and airport operators such as Beijing capital airport, Shanghai Hongqiao airport and Guangzhou Baiyun airport. China National Aviation Co executive director Zhang Xianlin said the acquisition pushed forward the group's strategy to expand cargo handling services. Beijing-based CNAC will have the biggest single stake in the delivery operation. Mr Zhang said: 'The development of freight-forwarding business has been slow on the mainland but the scope for development is huge.' The sector is still under state protection from foreign penetration. Mr Zhang said: 'Its business definitely needs expanding after the acquisition. 'There should be major development for the company this year as it starts to maximise the usage of the network it is building up.' He said the business would need about two years to mature. The company would not confirm reports that China National Aviation Corp (Group), the Hong Kong parent of the listed arm, was to buy into two local air freight-forwarding companies for more than $100 million. He said only that talks were being held with several local air freight-forwarding companies for potential investments. The group aims to set up a network of air cargo services linking Hong Kong and the mainland which will gradually extend its reach to Southeast Asia, Europe and the United States. Mr Zhang said the group was continuing discussions with potential parties to buy into mainland airlines and airport operators but had yet reached any conclusive deals. China National Aviation Co's share price rose four cents yesterday to a record high of $1.68 after listing on December 17 at an IPO price of $1.63.