China Eastern Airlines (MU, Shanghai Hongqiao) parent China Eastern Air Holding will benefit from a CNY31 billion yuan (USD4.66 billion) cash injection from four state-owned investors as part of an “equity diversification plan,” it announced in a statement on October 12.

China Life Investment Holding Limited, a subsidiary of China Life Insurance, will feed CNY11 billion (USD1.65 billion) into the state-owned carrier, while public transport specialist Shanghai Jiushi Group will inject another CNY10 billion (USD1.5 billion). China Tourism Group and investment firm China Reform Holdings Corporation will each inject CNY5 billion (USD750 million) into the airline.

The move is part of China’s efforts to diversify the ownership of its state-owned enterprises and comes as China Eastern posted a net loss of CNY8.5 billion (USD1.28 billion) for the first half of 2020 due to the coronavirus pandemic.

The country’s “three-year action plan for state-owned enterprise reform”, covering the years 2020 to 2022, was unveiled in early July, and China Eastern is reported to be one of the first beneficiaries of the plan.

Nevertheless, HSBC Holdings transport analyst Parash Jain told the South China Morning Post that the Big 3 Chinese carriers, Air China (CA, Beijing Capital), China Eastern, and China Southern Airlines (CZ, Guangzhou), are expected to have recovered enough from the crisis to post third-quarter profits later this month.

Meanwhile, on October 9, China Eastern shareholder CES Global Holdings, a Hong Kong-based wealth management services provider also affiliated to CES Leasing, sold 1.9 million H-shares (shares of mainland Chinese companies traded on the Hong Kong Stock Exchange) in brokerage firm Guolian Securities at an average price of HKD5 (USD0.75) per share, according to a stock exchange filing.

Also, on October 19, China Eastern Air Holding announced that it intended to sell 100% of its China Eastern Airlines Hotels subsidiary, which lost CNY9.02 million (USD1.36 million) in September. It established the hospitality unit in March 1998.