The Port of Tianjin (Tianjin Gang, ), formerly known as the Port of Tanggu, is the largest port in Northern China and the main maritime gateway to Beijing. The name "Tianjin Xingang"(), which strictly speaking refers only to the main seaport area, is sometimes used to refer to the whole port. The Port is located on the western shore of the Bohai Bay, centered on the estuary of the Haihe River, 170 km south east of Beijing and 60 km east of Tianjin city. It is the largest man-made port in mainland China, and one of the largest in the world. It covers 121 square kilometers of land surface, with over 31.9 km of quay shoreline and 151 production berths at the end of 2010.
Business Structure and Planning
Ownership Structure
The Port of Tianjin is a state-owned enterprise (SOE), run as an independent corporation, with separate finances and a commercial orientation. The Port Owner is the Tianjin Municipality People's Government (天津市人民政), through the Tianjin SASAC (Tianjin State Assets Supervision and Administration Committee—天津国有资产监督管理委员会), which is the full owner of the Tianjin Port (Group) Company (TPG). TPG's board is appointed by the Tianjin government. TPG is the effective holding company and main Port Operator, and it owns or has a stake on the majority of the Port's various operating outfits.
Since the 2009 merger, TPG's main operating subsidiary is Tianjin Port Development Co. Ltd (TPD), which in turn is the majority shareholder of Tianjin Port Holdings Co. Ltd (TPC). TPG has been injecting operational assets to TPC for several years, and since 2009 to TPD (most recently the Shihua Crude Oil Terminal). This has created somewhat of a functional division. The listed TPD, directly or through TPC, controls all terminals and direct cargo-handling operations. TPG still directly controls most of the utility, support and ancillary units related to the Port, and retains control of strategic planning. TPG is also directly or indirectly a party in 53 joint ventures
Financing and Capital Structure
TPG is a fairly large size SOE: it has been a member of the China 500 Enterprises since 2004, one of only two port operators in the list. At the end of 2011, Tianjin Port Group's assets reached CN¥ 88.8 billion (up 12% from 2010), and fixed assets were worth CN¥ 13.5 billion (up 2.1%). Yearly operating income was CN¥ 21.5 billion (up 6.7%), and total added value reached CN¥ 7.2 billion (up 14.3%) Like most SOEs, it has been attempting to diversify its sources of financing, relying more on securities and new types of debentures.
Equity: The two main operator holding companies are listed. Tianjin Port Holdings Company Limited (天津港股份有限公司) was listed as an A share () on the Shanghai Stock Exchange in 1996. Tianjin Port Development Holdings Limited (天津港发展有限公司) was incorporated in the Cayman Islands and listed as a red chip stock () on the Hong Kong Stock Exchange in 2005.
TPD (which as a Hong Kong listed company issues audited reports) in 2011 had an operating profit of out of HK$16.548 billion of revenue. As of 30 June 2012, TPD had assets of HK$34.174 billion and HK$20.713 billion of total equity. Despite healthy indicators, both TPC and TPD stock has performed weakly for the last few years, probably reflecting the market's concerns about the potentially over-expanded port industry in China.
Bonds and borrowing: As of August 2012, TPG had a credit rating of AAA according to Dagong Global Credit Rating. TPG regularly issues short-term bonds for working capital replenishment, commonly in annual emissions of (bills worth in both 2011 and 2012).
Despite elevated capital investment, the Port is not heavily leveraged. On 30 June 2012, TPD had HK$9.454 billion of consolidated borrowings for a debt/equity ratio of 0.16 and gearing ratio of 45.6%, while its liquidity is somewhat low at a current ratio of 0.9 and quick ratio of 0.84. Cash flow from operations in 2011 was HK$2.604 billion, cash at reporting date was HK$4.575 billion.
Tianjin Port Finance Company operates as the in-house financial service provider for the Group. Besides basic services as discounting of commercial notes, bill settlement and payments clearing, the TJPFC redirect funds between units of the Group in the form of loans, which circumvents the legal prohibition of direct financial transfers between members of a conglomerate.