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Shanghai Jin Jiang Shipping, the liner subsidiary of Shanghai International Port Group (SIPG), submitted its application for an initial public offering (IPO) to the Shanghai Stock Exchange on Friday.
Commonly referred to as JJ Shipping, the firm will issue 190,412 shares, 15% of its stock to be floated, allowing SIPG, which operates most of the container terminals in Shanghai port, to maintain control.
Currently, SIPG owns 98% of JJ Shipping, the remaining 2% held through another subsidiary, Shanghai Port International Passenger Center.
Guotai Junan Securities is the sole bookrunner for the IPO, first mooted in 2021. No fundraising target or listing timeline was disclosed in the listing prospectus.
Primarily an intra-Asia carrier, JJ Shipping entered the long-haul trades in 2021 after purchasing slots on Alibaba affiliate Transfar Shipping’s transpacific service.
The company says in its prospectus it will use the IPO proceeds to expand its fleet, particularly building smart and eco-friendly ships, and digitalise its logistics services.
Specifically, JJ Shipping plans to build six 1,800 teu and two 2,400 teu ships. Its subsidiary, Shanghai Hai Hua Shipping, plans to spend CNY211m ($31m) on two 1,000 teu ships for domestic coastal services.
Currently, JJ Shipping is the 35th–ranked liner operator, with a total capacity of nearly 40,000 teu on 29 owned ships and 13 chartered vessels. The fleet is dominated by 1,100 teu vessels. It has four 1,900 teu ships on order at Yangfan Group for delivery this year.
JJ Shipping said: “Investing in new shipping capacity will improve our cost advantage and enhance the company’s competitiveness. To suit our expansion strategy in South-east Asia and other markets, the company will expand the fleet size in a timely manner and improve the ratio of owned and chartered capacity of the route, so as to cope with market fluctuations.”
Addressing growing calls for shipping to slash emissions to meet the global target of decarbonisation by 2050, JJ Shipping said it would accelerate the pace of ‘green’ and low-carbon vessel construction.
JJ Shipping added, “We will steadily demolish old ships, prioritising the application of fuels such as LNG and methanol on new ships.”
For its digitalisation, JJ Shipping plans to introduce artificial intelligence to the back-end operations that will apply big data analysis and optimise its digital crew management system.
In 2021, amid record high earnings for the liner industry, JJ Shipping’s net profit more than doubled from 2020, to CNY1.23bn . In H1 22, it saw a net profit of CNY993.46m.
Looking ahead, the carrier said: “As the Covid-19 pandemic gradually normalises, vessel turnover will rebound, and the shortage of shipping capacity will be alleviated.
“Freight rates may drop, and the company’s operating performance may decline, to a certain extent. If there is an excess supply of shipping capacity, there may be a downside risk in market freight rates, which will adversely affect our operating performance.”
Several container lines have filed IPO applications in Shanghai and Hong Kong, including TS Group and Ningbo Ocean Shipping, hoping to attract investors after two years of record earnings. However, others, like South Korea’s SM Line, have withdrawn listing attempts due to lacklustre interest.