China Resources Enterprise (CRE) will dispose of its Hong Kong and mainland petroleum businesses separately rather than as a single unit, according to managing director Mark Chen. Mr Chen reiterated the company's plan to offload non-core assets - including petroleum distribution and property investments - over the next two to three years. CRE is also believed to be in negotiations to sell its 10 per cent stake in Hong Kong International Terminal. 'Introducing partners, disposing of whole assets or spinning off new listings are all options we should consider,' Mr Chen said. Analysts estimate the sale of the petroleum business could reap about $5 billion for CRE, based on an 11 times price-earnings ratio. China Everbright Research analyst Matthew Chow said the company's local petroleum distribution assets should gain a higher premium than the firm's mainland assets. The petroleum business contributed nearly one-third of the conglomerate's net profit last year, but analysts said this was likely to fall to about 22 per cent, or $460 million, after the sale of its 10.5 per cent stake in Qingdao Qirun Petrochemical for 85 million yuan earlier this year. Nevertheless, CRE's non-core investments still perform strongly compared with its core assets, which include retail, textiles, food processing and breweries, leading to concerns over its profitability. Mr Chen said the sales would have a minimal impact on the company as it invests more in core assets. He also said it had finalised the acquisition of supermarket chain Tianjin Yuetan last week for 100 million yuan. CRE purchased Zhejiang Cikelong Supermarket for 280 million yuan last month.
