COSCO Pacific sells port stake for HK$610m
(China Daily/HK Edition)
Updated: 2005-03-24 13:47

Port operator COSCO Pacific has sold a 17.5 per cent stake in Shekou Container Terminals, a container terminal in Shenzhen, for HK$610 million, delivering a windfall profit that has prompted analysts to rethink earnings forecasts.

COSCO Pacific said in a statement yesterday it had sold its stake to port operator China Merchants Holdings (International). COSCO Pacific is the Hong Kong-listed container leasing and shipping terminal arm of China's largest shipping conglomerate, COSCO Group,

The sale price, at nearly four times the US$20 million purchase price, was expected to boost COSCO Pacific's earnings by US$61 million this year, said Geoffrey Cheng, a port and shipping analyst at Daiwa Institute of Research.

"The windfall represents about 22 per cent of our current earnings forecast for 2005," he said.

COSCO Pacific said the sale was part of a plan to focus its terminal development strategy in China's Pearl River Delta on Nansha Port in the southern city of Guangzhou.

Analysts said China Merchants was paying top dollar for the stake as the deal valued the whole terminal, which has two berths, at about US$447 million.

COSCO Pacific has agreed to take a controlling stake in a joint venture company to operate a container terminal at Nansha Port phase II in Guangzhou.

"Negotiations with Guangzhou Port Group are at the final stage and the contract is expected to be signed shortly," COSCO Pacific said.

Nansha Phase II will have six deep-water berths with annual handling capacity of up to 4.2 million twenty-foot-equivalent units and is expected to be operational in 2006.

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