Report by : Gan Yung Chyan
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
In the first half of 2018, Hainan Airlines Group (HNA) has frequently released signals to return to its main business of aviation, emphasizing “de-realization, de-leveraging, and focusing on the main business”. According to informed sources, HNA Group's focus on the main business of aviation has been fixed. In the future, it will only retain two major segments: HNA Airlines and HNA Logistics. HNA Capital may only retain leasing and trust business.
HNA Group currently has four major industry segments: HNA, HNA Logistics, HNA Capital, and HNA Technology. Public statistics in 2017 shows that the total assets of HNA Group are 1.5 trillion yuan, of which HNA Airlines and HNA Logistics account for 28% and 33% respectively, totaling nearly one trillion; the total operating income of the two is less than 400 billion. The proportion is 52%.
Dharma Finance reported that the large-scale contraction adjustment of HNA's return to the main business was carried out at the request of the government. The general idea was initially determined at the beginning of this year. Wang Jian, former chairman of HNA Group who passed away, said in an interview in April this year: "HNA Group will use a variety of means to conduct assets that are not relevant to the main business, are not profitable, and are not in line with national policy orientation. Optimize processing, unswervingly leverage and reduce asset-liability ratio."
On 24 October 2018, at the expansion meeting of the HNA Group Party Committee, Chen Feng also pointed out that HNA should focus on the main business of air transportation, adjust the direction and structure of industrial development, and firmly promote enterprise transformation and healthy development.
A large investment bank in Beijing recently analyzed that HNA Group, which has high debt and leveraged expansion, is under the background of deleveraging and risk investigation, or faces a large capital chain pressure. It is a priority to sell assets and survive. In addition, crazy mergers and acquisitions also bring digestive integration problems, return to the main business or inevitable.
HNA’s actions in the second half of this year confirm this.
In early June 2018, HNA Holdings announced that it intends to merge its Chongqing-based subsidiary West Air into Hainan Airlines, acquire HNA Technology, HNA Aviation and Tianyu Feixun to expand the aviation industry's territory and integrate the upstream and downstream industry chains. At the same time, investors such as Temasek were introduced to raise 7 billion yuan for engine maintenance investment projects. In addition, HNA Group has also reached a strategic cooperation with Jingdong Group to promote the e-commerce logistics globalization strategy in logistics real estate, air cargo transportation and cold chain logistics.
Note : HNA Airlines consists of Hainan Airlines, Grand China Air, China Xinhua Airlines, Shanxi Airlines, Air Changan, Tianjin Airlines, Capital Airlines, GX Airlines, Urumqi Air, Air Guilin, Fuzhou Airlines, Hong Kong Airlines, West Air and Deer Jet.
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
In the first half of 2018, Hainan Airlines Group (HNA) has frequently released signals to return to its main business of aviation, emphasizing “de-realization, de-leveraging, and focusing on the main business”. According to informed sources, HNA Group's focus on the main business of aviation has been fixed. In the future, it will only retain two major segments: HNA Airlines and HNA Logistics. HNA Capital may only retain leasing and trust business.
HNA Group currently has four major industry segments: HNA, HNA Logistics, HNA Capital, and HNA Technology. Public statistics in 2017 shows that the total assets of HNA Group are 1.5 trillion yuan, of which HNA Airlines and HNA Logistics account for 28% and 33% respectively, totaling nearly one trillion; the total operating income of the two is less than 400 billion. The proportion is 52%.
Dharma Finance reported that the large-scale contraction adjustment of HNA's return to the main business was carried out at the request of the government. The general idea was initially determined at the beginning of this year. Wang Jian, former chairman of HNA Group who passed away, said in an interview in April this year: "HNA Group will use a variety of means to conduct assets that are not relevant to the main business, are not profitable, and are not in line with national policy orientation. Optimize processing, unswervingly leverage and reduce asset-liability ratio."
On 24 October 2018, at the expansion meeting of the HNA Group Party Committee, Chen Feng also pointed out that HNA should focus on the main business of air transportation, adjust the direction and structure of industrial development, and firmly promote enterprise transformation and healthy development.
A large investment bank in Beijing recently analyzed that HNA Group, which has high debt and leveraged expansion, is under the background of deleveraging and risk investigation, or faces a large capital chain pressure. It is a priority to sell assets and survive. In addition, crazy mergers and acquisitions also bring digestive integration problems, return to the main business or inevitable.
HNA’s actions in the second half of this year confirm this.
In early June 2018, HNA Holdings announced that it intends to merge its Chongqing-based subsidiary West Air into Hainan Airlines, acquire HNA Technology, HNA Aviation and Tianyu Feixun to expand the aviation industry's territory and integrate the upstream and downstream industry chains. At the same time, investors such as Temasek were introduced to raise 7 billion yuan for engine maintenance investment projects. In addition, HNA Group has also reached a strategic cooperation with Jingdong Group to promote the e-commerce logistics globalization strategy in logistics real estate, air cargo transportation and cold chain logistics.
Note : HNA Airlines consists of Hainan Airlines, Grand China Air, China Xinhua Airlines, Shanxi Airlines, Air Changan, Tianjin Airlines, Capital Airlines, GX Airlines, Urumqi Air, Air Guilin, Fuzhou Airlines, Hong Kong Airlines, West Air and Deer Jet.
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