BUSINESS

State-Owned Shipping Giant Drops Consolidation Plans

Published: May. 29, 2025 8:37 p.m. GMT+8

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The two listed subsidiaries of China Merchants Group, CMES and Antong Holdings, said their consolidation plan was terminated due to changes in market conditions, as well as a failure to agree on terms. Photo: AI generated

China Merchants Group Ltd. (CMG) has abandoned plans to consolidate its container shipping operations, a move one analyst attributed to unexpectedly strong first-quarter earnings from the business.

Two listed subsidiaries of CMG — China Merchants Energy Shipping Co. Ltd. (CMES) (601872.SH) and Antong Holdings Co. Ltd. (600179.SH) — announced that the plans had been dropped in separate stock exchange filings Wednesday. The companies attributed the termination to changes in market conditions and the target companies’ situations, as well as a failure to agree on transaction terms.

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China Merchants Group dropped plans to consolidate its container shipping due to strong Q1 earnings and inability to agree on terms.
Antong’s Q1 profit jumped 371.5% (925.79% excluding one-offs), and CMES’ container segment profit more than tripled despite overall profit falling 37.1%.
The global container shipping sector rebounded, with Q1 net profit rising 82.8% year-on-year to $9.9 billion.

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Who’s Who

China Merchants Group Ltd.: China Merchants Group Ltd. (CMG) is a parent company with listed subsidiaries including China Merchants Energy Shipping Co. Ltd. (CMES) and Antong Holdings Co. Ltd. It was pursuing a consolidation of its container shipping operations but recently abandoned these plans due to strong first-quarter earnings and changing market conditions, reflecting the sector’s robust performance and growth potential.

China Merchants Energy Shipping Co. Ltd.: China Merchants Energy Shipping Co. Ltd. (CMES) (601872.SH) is a listed subsidiary of China Merchants Group. In the first quarter, its overall profit fell 37.1% to 865 million yuan, but its container shipping segment’s net profit more than tripled to 335 million yuan. CMES was involved in a planned consolidation with Antong Holdings, which has now been abandoned due to strong sector performance and valuation issues.

Antong Holdings Co. Ltd.: Antong Holdings Co. Ltd. (600179.SH) is a listed subsidiary of China Merchants Group Ltd. In the first quarter, its profit surged 371.5% to 241 million yuan, mainly due to operational improvements and rising freight rates. Excluding one-time gains, profit rose 925.79%. Antong was involved in a now-abandoned consolidation plan and is considered to have strong earnings, which impacted the deal’s valuation.

Sinotrans: Sinotrans is a container liner company that was part of the planned consolidation by China Merchants Group. It focuses on short-distance international shipping routes and is considered to have strong growth potential. Some CMES investors opposed the consolidation deal because they believed Sinotrans could achieve significant growth independently, rather than being merged under the new structure.

AI generated, for reference only

What Happened When

June 2024：: A plan was unveiled for Antong to issue shares to CMES to acquire a 100% stake in a container liner and a 70% stake in a company specializing in shipping wheeled cargo.

First quarter of 2025：: CMES' overall profit fell 37.1% to 865 million yuan, but its container shipping segment's net profit more than tripled to 335 million yuan. Antong's profit jumped 371.5% to 241 million yuan, or 925.79% if one-time gains are excluded. Global container shipping net profit hit $9.9 billion, up 82.8% year-on-year.

Wednesday, May 28, 2025：: China Merchants Group's listed subsidiaries, CMES and Antong, announced in separate stock exchange filings that plans to consolidate their container shipping operations had been dropped.