Ningbo Port intends to increase 10 billion yuan "marriage" Shanghai Port Group to promote the integrated development of the Yangtze River Delta

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On the evening of February 28, reporter Wu announced the resolution of the first extraordinary general meeting of shareholders in 2020 to consider and pass the proposal for the non-public issuance of 2020 a shares. According to the plan, the company will issue a total of 2.635 billion shares to Shanghai Port Group and its controlling shareholder, Ningbo Zhoushan Port Group, with raised funds of 11.215 billion yuan. Ningbo Port is two major ports with strong strength, and it is the main operating body of the public wharf of Zhejiang coastal ports. The company aims to build the world's leading integrated logistics service provider with a port as the core, and is committed to accelerating the construction of a world-class strong port and the construction of a world-class port cluster. In 2019, the cargo throughput of Ningbo Zhoushan Port exceeded 1.1 billion tons, ranking first in the world for 11 consecutive years. The container throughput exceeded 27 million TEUs, ranking third in the world for two consecutive years. Shanghai Port Group is the public terminal operator of Shanghai Port and the first listed port joint-stock company. Its Yangshan Port Phase IV is the world's largest single fully automatic terminal and the world's most comprehensive automated terminal. In 2019, Shanghai Port completed a container throughput of 43.303 million TEUs, ranking first in the world for 10 consecutive years. In recent years, Ningbo Port has focused on the development of three major green environmental protection projects, namely the "oil-to-electricity" of portal cranes, the "oil-to-gas" of trucks, and the shore power access of ships. Efforts to promote the construction of green port projects. Over the past five years, the energy consumption per 10,000 yuan of output value of Ningbo Zhoushan Port has decreased by 25%, the energy consumption per 10,000-ton throughput has decreased by 23%, 188,800 tons of standard coal have been saved, and 480,000 tons of carbon dioxide and other greenhouse gases have been reduced. During the new round of pneumonia epidemic, Ningbo Port will ensure the smooth flow of dock materials, provide customers with high-quality and efficient loading and unloading services, and open up green channels for epidemic prevention and relief materials. In view of the tight transportation capacity affected by the epidemic situation, the company has made full use of the advantages of the fleet and railway transportation, and strived to provide assistance for the local "vegetable basket" supply guarantee, resume production and import and export of goods. In addition, in recent years, the operating income of Ningbo Port has increased steadily, from 16.3 billion yuan in 2016 to 24.3 billion yuan in 2019, an increase of nearly 50%. In 2019, the company's annual cargo throughput increased by 4.7%, revenue increased by 10.8%, and operating profit increased by 17. 35%. The cooperation between the two parties has a long history. Ningbo Port and Shanghai Port Group are the main operating entities of the two major ports in the Yangtze River Delta. The two sides have maintained close contacts, strengthened exchanges through high-level talks and regular exchange visits, and carried out cooperation in many areas such as terminal construction, shipping services, and financial investment. As early as March 2010, the two sides jointly established Shanghai Port and Shipping Equity Investment Co., Ltd., each of which invested 50% to invest in transportation, shipping, energy and related projects. In January 2012, Ningbo Port invested in Wenzhou Jinyang Container Terminal Co., Ltd., a joint investment of Wenzhou Port Group and Shanghai Port Container (Macau) Co., Ltd., a subsidiary of Shanghai Port Group. With the support of both parties, the production and operation of Jinyang Container Company continued to grow steadily. The efficiency of ship operation services is at the forefront of domestic terminals of the same size, and has achieved continuous profits. Since then, the two sides have cooperated more closely. On February 19, 2019, Zhejiang Haigang Group and Shanghai Group signed the Xiaoyangshan Comprehensive Development Cooperation Agreement. Zhejiang Haigang Group invested in Shanghai Shengdong International Container Terminal Co., Ltd., a wholly-owned subsidiary of Shanghai Port Group, in the form of RMB capital increase. After the investment was completed, Shanghai Port Group and Zhejiang Haigang Group held 80% and 20% of the shares of Shengdong Company, respectively. Since then, based on the "three unifications" principle, the joint venture Shengdong Company will become the only development, construction, operation and management entity on the north side of Xiaoyang Mountain in the future. From the initial joint investment in non-core areas to the in-depth cooperation of major port businesses, and today the introduction of Shanghai Port Group as a strategic investor in Ningbo Port, the two sides have come closer.

In response, Ningbo Port actively integrates into national strategies such as the “One Belt and One Road”, the Yangtze River Economic Belt, and the integration of the Yangtze River Delta, accelerates the integration of terminal hubs, promotes the construction of a modernized comprehensive port in Ningbo Zhoushan Port, and achieves sustainable, healthy, and stable development of the company. The introduction of non-public issuance of A shares by Shanghai Port Group is an important measure for Ningbo Port to further optimize the equity structure, realize the strategic reorganization of port resources in the Yangtze River Delta region, and promote the coordinated development of ports in the Yangtze River Delta region. According to the bill, the financing of Ningbo Port does not exceed 11.215 billion yuan, of which 8.9 billion yuan will be used for the No. 6-10 container terminal in Meishan Port Area, the second phase of Zhongzhai Ore Terminal in Chuanshan Port Area, the general berth reconstruction project in Beilun Port Area, Infrastructure construction and asset acquisition of No. 1 container terminal in Chuanshan Port Area. After the project is completed and put into operation, Ningbo Zhoushan Port will increase the annual container throughput capacity of 5.556 million TEUs and the throughput capacity of 20 million tons of ore, enhance the attractiveness of the world's large container ships and international transit containers, and improve the berthing conditions of ultra-large ore ships. And unloading capacity, improve the import iron ore transportation system in the Yangtze River Delta region, and improve overall competitiveness. In addition, the funds raised in this non-public offering will be used to supplement working capital of 1.3 billion yuan and repay bank loans of 1 billion yuan, thereby optimizing the asset-liability structure, reducing the asset-liability ratio, alleviating the company's funding requirements for development, and reducing financial costs. According to analysis of relevant industry players, "This fixed growth will promote the" marriage "of two 'world's first' ports. This will promote the complementary advantages of both parties, enhance the cooperation effect of port groups, and further promote the integrated and coordinated development of ports in the Yangtze River Delta. Accelerating Shanghai's construction of an international shipping center will also help both sides better serve the Yangtze River Economic Belt, enhance the country's overall competitiveness in global open cooperation, and share development dividends. "(Editor Qiao Chuanzhuan)