Port operators in China’s Liaoning province see shares rally on integration plan

2-MIN READ2-MIN

Chinese cars wait to be exported at a port in Dalian, Liaoning province. The government of China’s northeast province has signed a framework agreement with China Merchants Group to establish a new Liaoning Port Group. Photo: Reuters

Published: 3:09pm, 14 Jun 2017Updated: 10:45pm, 14 Jun 2017

Dalian Port Corporation shares rallied 16.3 per cent in Hong Kong on Wednesday morning, its biggest daily gain since March last year, on news of port management consolidation in Liaoning province.

The government of China’s northeast province signed a framework agreement with China Merchants Group to establish a new Liaoning Port Group through the integration of Dalian Port and Yingkou Port Group.

All the shares of listed port operators in Liaoning province surged on Wednesday, with Dalian Port leading the rally and closing in Hong Kong at HK$1.6, its highest in more than 10 months. Dalian Port’s Shanghai traded shares reached the daily gain limit of 10 per cent to 3.2 yuan. Yingkou port and Jinzhou port both rallied by their 10 per cent daily limit to 3.7 yuan and 4.6 yuan respectively.

“The integration is a good excuse for investors to speculate on port operators,” said Victor Au, chief operating officer at Delta Asia Securities. “The port industry has been lightly traded for a long time.”

It will strengthen the government’s “going out” programme to encourage exports, he added.

As a result of the integration, Corrine Png, chief executive of Crucial Perspective, a Singapore-based research firm, said the newly formed Liaoning Port group “will emerge as a big port group in China instead of just a small-medium sized port”.