Nanjing Tanker, part of state conglomerate China Merchants Group (CMG), has begun its share buyback programme to further boost investors’ confidence after posting stronger results for 2019.
In an exchange filing, the Shanghai-listed company said it bought back 0.14% of its shares on Monday at a price between CNY 2.37 ($0.33) and CNY 2.41 per share.
The company’s share closed on Wednesday at CNY 2.47.
The purchase came after Nanjing Tanker in early March said it planned to spend somewhere between CNY 150m and CNY 200m in a 12-month share buyback scheme.
“We will use our own money or get financing to buy back our shares via call auctions to strengthen the benefits of our shareholders and boost investors’ confidence,” Nanjing Tanker said.
While the company’s share has been trading above its net asset value, Nanjing Tanker said it is fulfilling an earlier promise to buy back some of its shares when it became the first relisted A-share stock in Shanghai in early 2019.
After being removed from the Shanghai Stock Exchange in 2014 following four consecutive years of losses, Nanjing Tanker initiated a series of restructuring measures backed by its then parent group Sinotrans & CSC, which later merged with CMG.
The company improved its profitability, sold off its VLCC fleet, carried out debt-to-equity swaps and bought back 12 vessels on financial leases before successfully applying to be relisted.
Strong annual results
In 2019, Nanjing Tanker recorded net profits of CNY 877m, more than doubling from CNY 360m in 2018. Revenues rose by 20% to CNY 4.04bn.
“Last year was a record year for us as we were supported by major clients. Our cost-cutting measures, including slow steaming and pooled procurement of bunker, also helped,” Nanjing Tanker said.
“The IMO 2020, continued expansion of global refining capacity, and rising exports of oil products from China are supporting our product tanker business.”
The company said the coronavirus outbreak is hurting Chinese oil demand, and there are short-term challenges in domestic markets.
To improve its competitiveness, the company said it plans to order a 3,700-dwt chemical tanker for up to CNY 70m via subsidiary Nanjing YangYang Chemicals Transport & Trade.
Separately, Nanjing Tanker said it is looking to sell the 110,503-dwt crude tanker Bai Lu Zhou (built 2007) to avoid competition with other CMG firms.
Nanjing Tanker also has 56 product tankers and three ethylene and LPG carriers, according to Clarksons. They are operating in international and domestic markets.
