(Yicai) Dec. 28 -- Shares China Merchants Energy Shipping dropped despite the Chinese shipping giant said it plans to buy four new ocean-going ships for USD160 million to enhance its core competitiveness and sustain the profitability of its fleet of dry bulk carriers and multi-purpose vessels.

China Merchants Energy [SHA: 601872] was trading 2.3 percent down at CNY5.86 (83 US cents) as of 2.00 p.m. in Shanghai today. The broader Shanghai Composite Index rose 1.4 percent.

China Merchants Energy will purchase two dry bulk carriers with a deadweight of 82,000 tons each and two MPVs with a deadweight of 62,000 tons each from its affiliate company China Merchants Industry Holdings, the Shanghai-based buyer announced yesterday.

The four ships will be built by China Merchants Industry’s unit China Merchants Jinling Shipyard, scheduled to be delivered in 2026, China Merchants Energy noted.

With rising demand for long-distance and large-volume transport of bulk products, such as grain, wind power equipment, paper pulp, and prefabricated engineering parts, and insufficient global transport capacity amid aging international dry bulk carriers, building new ships with stronger technical capabilities can help the company better expand its market share, China Merchants Energy pointed out.

China Merchants Energy is a large-scale ocean-going transporter with oil, gas, and dry bulk cargo transportation as its core business. The company is the world’s second-largest non-financial shipowner by transport capacity.

China Merchants Energy’s revenue from the dry bulk transport business accounted for 40 percent of the total last year. The deadweight capacity of its 147 dry bulk carriers reached 22.2 million tons as of the end of last year. Some 102 self-owned vessels had an average age of 7.9 years.

Editor: Futura Costaglione