China Southern shares surge on positive results, plan for reform

Source:Global Times Published: 2017/1/10 21:48:39

Shares of China Southern Airlines surged on Tuesday in response to the company's positive financial results in 2016 and the State-owned airline's plan to carry out mixed-ownership reform in 2017 to diversify its ownership structure.

The shares rose by the daily limit on the Shanghai Stock Exchange, prompting a temporary halt during the afternoon before closing 7.38 percent higher at 7.71 yuan ($1.11) per share.

The airline reported on Monday its revenue grew 3.2 percent year-on-year to 115.75 billion yuan in 2016, while its fleet expanded to more than 700 aircraft.

Cargo and passenger volumes rose 8.9 percent and 4.8 percent, respectively, according to civil aviation industry news portal carnoc.com.

The airline said on Monday that it will pursue mixed-ownership reform to bring in outside capital and expand its business by increasing investment in new emerging sectors, carnoc.com reported.

At its annual conference, China Southern said it will focus on investment from Internet companies and arrange share swaps or form joint ventures with industry leaders in its mixed ownership reform.

The airline will also accelerate efforts to integrate its businesses and market-oriented operations through mergers and restructurings, according to the report.

China Southern's mixed-ownership reform is part of China's reform agenda of State-owned enterprises (SOEs) to improve efficiency.

China set mixed-ownership reforms for SOEs in seven sectors.

The sectors include electricity, oil and civil aviation as its top priority in 2017, a statement from the State Council, China's cabinet, said on December 16.

China Eastern Airlines was the first State-owned airline to announce mixed-ownership reforms last year, according to media reports.

Global Times

Posted in: COMPANIES

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