China Merchants’ net profit rises 40%

China Merchants’ net profit rises 40%    Chinese port and container manufacturing group China Merchants Holdings (International) Co. Ltd. reported Tuesday a 40-percent jump in net profit to HK$2.06 billion ($264 million) for 2004 from HK$1.47 billion in 2003.
   The profit rise came from increased earnings from both its port business and its container manufacturing activities, which were buoyed by a continuing boom in container shipping in Asia.
   Controlled by the government of mainland China, China Merchants has a growing portfolio of port investments in Hong Kong, Shenzhen (in South China), the Yangtze River Delta (in East China) and the Bohai rim (in Northeast China), and is becoming one of Asia’s largest container terminal operators.
   In December, China Merchants signed a deal with the port of Shanghai under which it will acquire a 30-percent stake in Shanghai’s port operator, Shanghai International Port (Group) Co. Ltd., for RMB5.6 billion ($677 million) in cash.
   Reuters reported analysts as saying China Merchants expects its acquisition of the 30-percent stake in Shanghai to raise its 2005 per share earnings by 14.5 percent.
   In the first half of 2004, the terminals in which China Merchants has a stake handled a total of 5.8 million TEUs.
   Most of China Merchants' profits in 2004 came from its shareholdings in associated companies and joint ventures. Its share of profit of associates rose 33 percent to RMB1.35 billion ($173 million) in 2004.
   Operating profit outside associated companies rose 9 percent to HK$607 million ($78 million) last year. Its revenue outside associated companies increased 13 percent to HK$2.41 billion ($309 million).
   China Merchants said its net profit included a gain of about HK$274 million ($35 million) from the sale of its tanker business in the second half of 2004.
   Reuters reported that China Merchants nurtures ambitions to “become a world-class port operator.”