Grand China Logistics, a subsidiary of China's fourth-largest aviation group HNA Group, yesterday signed a US$1.2 billion shipping leasing contract with CDB Leasing in Shanghai.

CDB, the country's largest financial leasing company by registered capital, will buy more than 20 large bulk ships worth US$1.2 billion from Jinhai Heavy Industry, a shipbuilder controlled by Grand China Logistics, and then lease the ships to the logistics company, said Tan Xiangdong, a board director of HNA.

The cooperation is in line with Shanghai's target of building itself into international financial and shipping hubs by 2020, Tan said.

"Shipping leasing is a popular financing method in developed countries, and we believe the two sides will leverage their advantages in the cooperation to help innovate the city's financial and shipping systems," Tan said.

He also said HNA has set up its own shipping leasing company in Shanghai with registered capital of 1.7 billion yuan (US$250 million) and was preparing to set up a shipping industry fund by the end of this year.

Grand China Logistics owns total assets of more than 40 billion yuan, 12 cargo planes and nearly 70 ships.

It targets making 25 billion yuan in revenue this year.