HNA-linked firms see shares dive as trading resumes

Aviation-to-financial services conglomerate HNA has been selling equity and real estate assets after a US$50 billion (S$68.5 billion) acquisition spree turned sour.
Aviation-to-financial services conglomerate HNA has been selling equity and real estate assets after a US$50 billion (S$68.5 billion) acquisition spree turned sour.PHOTO: REUTERS

SHANGHAI • Shares in companies linked to HNA Group slumped after resuming trading this week, highlighting investor concern over the embattled Chinese conglomerate, whose opaque ownership structure has sparked global regulatory scrutiny.

The decline was led by Hainan Airlines, China's fourth-largest airline and HNA's crown jewel, which opened 9.9 per cent lower yesterday after it lifted a six-month trading suspension.

HNA-affiliated CCOOP Group, which also resumed trading yesterday, opened 10 per cent lower, while Caissa Travel tumbled by the daily limit of 10 per cent when it opened after a six-month halt on Thursday.

Aviation-to-financial services conglomerate HNA has been selling equity and real estate assets after a US$50 billion (S$68.5 billion) acquisition spree turned sour. Hainan Airlines has been part of that effort, saying in March that it would take over stakes owned by HNA in airlines and hotel units.

Last month, the carrier said it would issue shares to up to 10 investors to raise up to 7 billion yuan (S$1.4 billion) for aircraft purchases and those stake acquisitions. It added that its owner would become Hainan Province Cihang Foundation, which is connected to HNA Group, after its restructuring.

The share slump was a vote of no-confidence in the plan, an analyst from a Shanghai-based brokerage said. "Previously it said it would buy a few other assets but these are not included in the latest plan... so the feeling is that the restructuring is not going as smoothly as previously thought," he said, declining to be named as he was not authorised to speak to media.

Hainan Airlines said last month that its restructuring would exclude previous plans to take stakes in Guilin Airlines, HNA Hospitality Group and an unnamed overseas hotel operator.

The decline was led by Hainan Airlines, China's fourth-largest airline and HNA's crown jewel, which opened 9.9 per cent lower yesterday after it lifted a six-month trading suspension... HNA has been selling equity and real estate assets after a US$50 billion (S$68.5 billion) acquisition spree turned sour.

The analyst added that the carrier's shares could also be reacting to broad declines in Chinese airline stocks, linked to rising oil prices and a falling yuan.

An HNA spokesman said in an e-mail that the publicly traded firms were an important part of the group's portfolio. "We will continue to work closely with them as part of our overall strategy to streamline our asset portfolio and improve our financial and operational performance," he said.

Trading in shares of HNA Investment Group, HNA Infrastructure Investment Group and Tianjin Tianhai Investment, all suspended in January, has yet to resume.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 21, 2018, with the headline 'HNA-linked firms see shares dive as trading resumes'. Print Edition | Subscribe