November 7, State-owned carrier China Eastern Airlines Co. Ltd. (China Eastern, 600115.SH, 0670.HK) plans to sell its 5% stake in China Eastern Airlines Real Estate Investment Co. to Shanghai China Eastern Airlines Investment Co. for RMB 100 million, guandian.cn reported, citing a company announcement on Nov. 4.
China Eastern Airlines Real Estate had a registered capital of RMB 100 million and a net asset of RMB 2.013 billion at the end of 2010. The real estate company reported net profit of RMB 3.82 million last year.
Shanghai China Eastern Airlines Investment is a wholly owned subsidiary under China Eastern Airlines Group, parent of the Shanghai-based carrier.
China Eastern said the stake sale was aimed at lowering its investment risks, and would help the carrier focus on its core business.
The Chinese government has been running a campaign to contain soaring housing prices since April 2010, rolling out such measures as home-buying restrictions and tightened bank lending to the real estate sector.
In addition, the State-owned Assets Supervision and Administration Commission (SASAC) ordered in March last year that all 78 centrally administered state-owned enterprises whose core business is not real estate must sever their ties with the sector.
The SASAC said in February that 14 non-property central SOEs had exited the sector last year, and more than 20 are expected to follow suit this year.
China Eastern booked RMB 24.45 billion in third-quarter sales revenue, up RMB 2.62 billion from the same period last year.
The carrier’s Q3 net profit grew 4.85% year-on-year to RMB 3.31 billion, while net profit for the first 9 months of this year hit RMB 5.76 billion, up 12.96% y-o-y, according to a company statement filed with the Shanghai Stock Exchange on Oct.30.
Management Changes
On Nov. 4, China Eastern announced Li Jun had stepped down as vice chairman of the board. Li is reportedly succeeding Wang Changshun as deputy director of the Civil Aviation Administration of China (CAAC).
Management changes are also expected in the other 2 state-owned carriers: Air China Ltd. (601111.SH, 0753.HK) and China Southern Airlines Co. Ltd. (600029.SH, 1055.HK).
CAAC’s Wang will replace Kong Dong as general manager of Air China Group, a source claiming knowledge of the matter told the 21st Century Business Herald last week.
Source:En.21cbh