CSSC prepares for big shake-up

Shanghai - Two subsidiaries of China State Shipbuilding Corp, the primary contractor for China’s naval force, halted stock trading on the Shanghai Stock Exchange on Wednesday as their parent company prepares a major asset reorganization, the group said on its website. The announcement said that whether the reforms take place would be decided in the next 10 trading days.

CSSC Holdings Ltd and CSSC Offshore and Marine Engineering Co Ltd both acted upon the notices from their parent company about the potential asset reform by suspending their stock trading. The CSSC group is the parent of three listed companies. CSSC Science and Technology Co Ltd didn’t respond to the notice.

Dong Liwan, a shipbuilding industry professor at Shanghai Maritime University, said China’s shipyards have been keen to shift their core business to maritime engineering and other fast-growing businesses such as new materials, mechanical and electrical equipment, because apart from higher profits, there is also less competition as not many shipbuilders are able to produce these sophisticated products: “The halt of trading has also aroused investor speculation that CSSC and CSIC (China Shipbuilding Industry Corporation) may merge sooner or later, as both of them are deepening mixed-ownership reform,” said Dong.

(READ MORE)