China Merchants Holdings (CMH) is to inject port-related assets worth up to 1.2 billion yuan (about HK$1.12 billion) into its Hong Kong-listed flagship China Merchants Holdings (International) (CMHI). But it will wait until market conditions improve before going ahead. The move will make red-chip CMHI the sole manager of the group's port assets, increase its operating scale as an infrastructure unit and prepare it for foreign competition after China enters the WTO. CMH, controlled by the mainland Ministry of Communications, plans to shed non-core manufacturing, tourism and hotel assets as part of an ongoing restructuring. It will focus on property, logistics, financial services, transportation and infrastructure. Its 52.2 per cent-held subsidiary CMHI manages ports and toll roads, and has interests in manufacturing. CMH chairman Qin Xiao told a press briefing on the restructuring yesterday the company would sell all its port-related assets not already held by CMHI to the Hong Kong subsidiary. The assets are valued at about 1.2 billion yuan, the bulk of which is accounted for by CMH's B-share China Merchants Shekou Holdings. CMHI has total net assets of about 10 billion yuan. CMH president and CMHI chairman Fu Yuning said it was likely to wait until some time next year to carry out the asset injection. He also said CMHI would seek to increase its stakes in various mainland ports after Beijing agreed to exempt it from a ban on foreign investors owning more than 50 per cent of mainland ports. As a Hong Kong-registered company, CMHI was previously considered a foreign entity but was given special treatment in the phase-two development of the Shekou port. Mr Fu said the exemption opened the door for it to raise its stakes of 18.8 per cent to 49 per cent in mainland ports to up to 100 per cent, subject to Beijing's approval. Had CMHI not received the exemption, the shareholding structure of the phase-two project would have been impossible, given Swire Pacific, shipping firm P&O Nedlloyd and the Wharf group's Modern Terminals have a combined stake of about 40 per cent. CMHI also has a 40 per cent stake. CMH is also contemplating the future of its toll-road assets, valued at six billion yuan. It has considered injecting them into CMHI, or merging them with its subsidiary's toll roads and spinning off the combined operation. 'We are looking at many different options,' Mr Qin said.