(Yicai Global) Sept. 19 -- Shandong province-based China National Heavy Duty Truck Group, also known as Sinotruck Group, whose major business is commercial vehicle manufacturing, will soon sell its real estate business, Tan Xuguang, the company's new chairman, said at an internal meeting.

Yicai Global obtained the information from this meeting's script.

"Sinotruck is pursuing speculative profits in plying the real estate business. We must devote ourselves to the major business, which means fortifying the entire commercial vehicle portfolio, especially the high-tech mid and high-end brands," Tan said.

Many big Chinese state-owned companies have developed different scales of real estate business following the industry's price surge for more than a decade.

Sinotruck has been doing its multi-billion dollar realty business for ten years, during which time the best annual result was a mere CNY100-plus million (USD14 million) and the worst was a measly CNY1 million (USD140,000), Tan said.

"The realty business sector still owns many properties which will sell at a good price if we hold open bids quickly. I think the lowest price may be CNY20 billion (USD2.9 billion). We can use the money to develop our entire commercial vehicle franchise," Tan said.

Tan has expressed his desire to sell the realty business many times since he took office less than 20 days ago, as the realty business is inimical to the company's industrial development, low in efficiency and high in risks.

"We should become a comprehensive commercial vehicle maker instead of limiting our business to heavy-duty trucks," Tan added, addressing Sinotruck's future.

Editor: Ben Armour