(Yicai Global) June 14 -- The local government in China's northeastern province of Liaoning plans to integrate local port resources and establish a unified port operation platform in cooperation with China's state-owned giant, China Merchants Group. The integration plan will involve three local port companies in Liaoning that are listed on the A-share market.
Yingkou Port Liability Co. (SHG:600317), Dalian Port (PDA) Co. (SHG:601880) and Jinzhou Port Co. (SHG:600190) temporarily suspended trading of their shares at the same time on June 13, and issued statements the same day, saying that the Liaoning provincial government had signed the "Port Cooperation Framework Agreement" with China Merchants Group and that both sides would cooperate to establish the Liaoning port unified operation platform.
The agreement also mentioned that China Merchants Group would further integrate other port operators in Liaoning province. The two sides strive to complete the establishment of the Liaoning Port Group by the end of 2017 and the integration of other port operators in the province by the end of 2018, following which the controlling shareholders and 'de facto' controllers of the three listed companies may change.
Jiangsu province integrated eight coastal state-owned port enterprises and established Jiangsu Port Group Co. last month, reported the Chinese Securities Journal. Earlier in 2015, Zhejiang province also integrated the five major local ports and set up Zhejiang Port Investment and Management Group Co.
"One port for one province" may become the final landscape of China's ports in the future, industry experts commented. It is believed that port integration will be conducive to the rational allocation of port resources and the rational division of labor between ports, eliminating stiff competition between them.
The three listed port companies in Liaoning resumed stock trading on June 14, with share prices of the three all rising by daily trading limit. Share price of Yingkou Port Liability jumped 10.09 percent to CNY3.71 (USD0.55), that of Dalian Port (PDA) advanced 9.97 percent to CNY3.20, and that of Jinzhou Port advanced 10.02 percent to CNY4.61.