HONG KONG, Sept 2 (Reuters) - China Merchants Holdings (International) Co Ltd (0144.HK: Quote, Profile, Research, Stock Buzz), the nation's largest port operator, said the listing of China Ningbo Port Group will not proceed this year due to weak market situation.

It said the port group needs more time for preparation.

"It's good news since the current market situation in Hong Kong and China is unfavourable," China Merchants Chairman Fu Yuning told reporters on Tuesday.

China Merchants, which commands more than one-third of the China market, paid 847.3 million yuan earlier this year for a 5.4 percent stake in Ningbo Port, the operator of China's eastern port of Ningbo.

Ningbo Port said in March that it was looking to float shares both on the mainland and in Hong Kong this year to raise money for expansion. China Merchants posted a 33 percent rise in first half net profit to HK$2.0 billion.

But traffic growth in many Chinese container ports are seen slowing as the country's exports growth trend continues to soften on weakening global demand. (Reporting by Alison Leung; editing by Rory Channing)
 

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China Merchants first half profit jumps 33%

By Sandra Tsui in Hong Kong - Tuesday 2 September 2008

PORT operator China Merchants Holdings International is confident of double-digit volume growth in west Shenzhen’s terminals, but is forecasting that Shenzhen port as a whole might see throughput growth slip to below 10% for 2008. 

“The throughput growth in west Shenzhen can surely be maintained at double-digit level in 2008,” said Fu Yuning, chairman of the Hong Kong-listed company, at the firm’s first-half results presentation. 

The company, which controls nearly all the terminals on the west side of Shenzhen port including the Shekou, Chiwan and Mawan container terminals, said container throughput of west Shenzhen rose 17.8% year-on-year to 5.9m teu in the first half of 2008, much higher than the 7% average throughput increase in Shenzhen which handled 10.2m teu in the period. Throughput at the second busiest boxport in China rose 14% last year. 

CMHI recorded a 33% increase in its first-half net profit, to HK$2bn ($256m). Its revenue also increased by 17.5% to HK$3.4bn. 

Apart from Shenzhen, CMHI also holds stakes in boxports in Hong Kong, Shanghai, Tianjin, Qingdao, Ningbo and Zhangzhou. 

Its box terminals handled a total of 25.1m teu in the period, up 13%. Throughput at its terminals in China and Hong Kong increased by 15% and 4%, to 21.66m teu and 3.48m teu respectively. 

Dr Fu said Ningbo port, in which the company has a 5.4% stake, would not go public this year as the company had just finished its restructuring process that there would not be enough time. It was also because of the poor sentiment and performance in the stock markets this year. 

The firm’s bulk terminal business, which contributed to roughly 10% of its total terminal revenue, recorded 47% increase in throughput, to 114m tonnes in the period. 

Commenting on the recent sharp fall in dry bulk shipping rates and China’s falling demand for foreign iron ore, Dr Fu admitted that could affect its bulk terminal business and slower throughput had been observed in its bulk terminals. 

Its dry bulk terminals in southeast China’s Zhanjiang port has seen its throughput in July falling below the average monthly throughput in the first half of the year. 

He expects the performance of its bulk terminals in the second half would be worse than that of the first half. 

He forecasts Zhanjiang port, which achieved throughput growth of 37% in the first half, would see full-year volume increase slow to 30%. 

He added that the profit margin for handling containers is higher than that of handling bulk cargo, however, the company sees stable growth opportunity in the bulk terminal business in the country where raw materials such as iron ore and oil are of high demands. 

Deputy general manager Cynthia Wong said the company has planned capital expenditure of Yuan1.5bn-Yuan2bn for the second half of the year. The fund will be mainly spent on the port development in Shenzhen and Qingdao. Capital expenditure of 2008 will amount to Yuan4bn to Yuan4.5bn.