Red-chip conglomerate China Resources Enterprises (CRE) has shelved a proposal to acquire its parent's mainland logistics business, because of the sector's uncertain earnings outlook.
The proposed purchase was part of the company's plan to turn itself into one of Asia's largest commodities distribution businesses.
The change was unveiled by senior management at a presentation for analysts yesterday.
Instead of further asset purchases from parent China Resources Holdings (CRH), CRE told analysts it hoped to strengthen its existing businesses, such as breweries and retailing, with total capital expenditure of HK$10 billion in the next three to five years.
In June last year, CRH - an unlisted SAR investment arm of China's foreign trade ministry - announced a restructuring plan aimed at turning CRE into one of Asia's leading distribution companies through asset injections.
The food and beverage, retailing and infrastructure conglomerate acquired petroleum and chemical distribution businesses from CRH last year. More acquisitions of logistics and construction businesses had been expected to facilitate the overhaul of CRE.