Injection may involve 72 bulk vessels worth up to 3b yuan and a spin-off China Shipping Development may receive an injection of assets from its state-owned parent company and spin off an enlarged bulk shipping firm, according to the company, confirming reports that have sent its stock value spiralling downwards this week. The injection could involve as many 72 mostly older bulk vessels - with an estimated asset value of two billion yuan to three billion yuan - that the parent China Shipping Group mostly uses to distribute goods such as coal, steel and grain between coastal cities. '[The group] is considering having its own restructuring which may involve the injection of certain dry bulk cargo carriers into a new company ... to be separately listed,' company secretary Yao Qiaohong said in statement filed with the stock exchange yesterday. Mr Yao said nothing had been finalised and the proposal might not proceed. The value of China Shipping shares has fallen 9.3 per cent to $5.85 since Friday, when news of the proposal emerged. Analysts and investors this week reacted cooly to the proposal, which could see China Shipping's core revenue base switch from domestic coal distribution to a more volatile international oil sector. 'This development could totally change [China Shipping Development's] investment thesis,' CLSA analyst Mike Lu said in a report on Monday. 'We recommend investors stay on the sidelines until further details are given.' According to a report by Credit Suisse First Boston analyst Karen Chan, the assets are likely to be 72 bulk vessels operated by the group's unlisted subsidiaries Dalian Shipping and Guangzhou Maritime Transport. Ms Chan estimated that the injection, provided there was no spin-off, could add 30 per cent to China Shipping's profit and sales. Bulk shipping accounted for about 43 per cent of its earnings in the first half. It is understood that any attempt to create the group's third listed shipping play - it also is the controlling shareholder of listed China Shipping Container Lines - would have to be approved by most of the A and H-share owners. 'I don't think the earnings dilution would be material,' said an analyst at a western investment bank. 'But if they spin off, the valuation dilution may be enough for shareholders to reject the proposal.' Oil shipping firms typically trade at half the earnings multiples of their bulk counterparts.