China Merchants 1st-Half Net Income Rises 12% After Global Trade Rebounds

China Merchants Holdings (International) Co., an investor in ports moving about a third of the country’s containers, said first-half profit rose 12 percent as gains in global trade lifted cargo traffic.

Net income increased to HK$1.93 billion ($248 million), or 79.06 Hong Kong cents a share, from HK$1.73 billion, or 71.27 HK cents, a year earlier, the company said in a Hong Kong stock exchange statement today. Sales rose 21 percent to HK$1.99 billion.

China Merchants, Cosco Pacific Ltd. and Hutchison Port Holdings Ltd. have posted gains in profit this year on rising demand for goods including Asian-made toys and furniture. Chinese exports rose 35.2 percent in the first six months of this year, customs data showed.

“First-half growth has been steady with the rebound in trade,” said Ronald Wan, managing director at China Merchants Securities Co. in Hong Kong.

China Merchants rose 0.4 percent to HK$26.05 at the close of trading in Hong Kong today. The stock has gained 3.2 percent this year, compared with a 5.2 percent decline for the benchmark Hang Seng Index.

Economic Growth

China Merchants’ first-half container volume rose 22.5 percent to 24.9 million 20-foot equivalent boxes, it said in the statement. Bulk cargoes rose 25.3 percent to 135.4 million tons, the company said.

The company proposed an interim dividend of 25 HK cents, same as a year earlier.

The export resurgence that has fueled profit gains at shipping companies and port operators may slow in the second half, as economic growth tempers in China, the U.S. and Europe.

Economic reports due in the U.S. this week are expected to show hiring and manufacturing probably cooled in August, as companies scale back and the U.S. recovery shows signs of stumbling.

China’s economy is cooling as the government trims credit growth from last year’s record $1.4 trillion and discourages multiple-home purchases to damp surging property prices. July industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated.

“Second-half container volume will still grow, but at a slower pace,” Hu Jianhu, China Merchants’s managing director, told reporters in Hong Kong.

Hutchison, Cosco

Parent company China Merchants Group said on Aug. 26 its net income in the first half rose 7.1 percent to 5.4 billion yuan ($794 million).

Hutchison Whampoa Ltd.’s port unit, the world’s largest container terminal operator, boosted first-half profit 35 percent. Hutchison Port Holdings Ltd.’s first-half earnings before interest and taxes rose to HK$6.1 billion from HK$4.49 billion a year earlier.

Cosco Pacific Ltd., Asia’s third-largest container-terminal operator, reported an 82 percent jump in first-half profit recovering world trade and the sale of a stake in a logistics venture. Net income rose to $189.9 million from $104.5 million a year ago. The company made an $84.7 million gain from selling its stake in Cosco Logistics Co. to its parent.

China Merchants is “on a constant lookout” to purchase ports, especially in Africa and other emerging markets, Hu said.

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net