Stocks related to HNA Group Co, a Chinese conglomerate owning businesses including airlines, tourism and financial services, surged on Thursday following media reports that the government plans to take over the financially troubled group.

Share price of Hainan Airline Holdings Co Ltd, the carrier owned by HNA Group, rose by the 10 percent daily trading limit to close at 1.76 yuan (25 cents) on Thursday in Shanghai. Shares of HNA Innovation Co Ltd, which engages in the business of tourism and real estate development, also jumped by 10 percent while those of HNA Infrastructure, which offers airport management and infrastructure services, soared by 8.76 percent.

The stock rally seemed to suggest that investors took the speculation of HNA Group being taken over by the government as a positive development. But the group has not responded to media requests for comments on the issue.

Bloomberg reported on Wednesday that China plans to take over the group and sell off its airline assets as the novel coronavirus outbreak has hit the group's ability to meet its financial obligations. The report cited people familiar with the matter saying that the government of Hainan province, where HNA Group is based, is in talks with the group to take control of it.

But Chinese newspaper China Business Journal cited a senior executive of HNA Group on Thursday saying that the report was not accurate and he has never known of anything about the group being taken over or restructured.

The group caught Chinese financial regulators' attention for its aggressive purchase of assets at home and abroad over the past few years. Since then, it has disposed of a large chunk of its assets and started to focus on its core business in airlines and tourism. But the group has run into financial difficulties with mounting debts and strained cash flows.

As of June last year, the group had total debt of 525.6 billion yuan while it had cash or short-term investment worth only about 50.4 billion yuan, according to its financial statement. Chen Feng, chairman of the group, said in December that this year would be a crucial period for the group to resolve its liquidity risks.

Regardless of the speculation about the group being taken over by the government, airliners and China's civil aviation industry will face greater pressure amid the novel coronavirus outbreak.

The daily volume of passengers by commercial airlines dropped substantially during Jan 25 and Feb 14 to a level of only one-fourth of the volume in the same period of last year, according to the Civil Aviation Administration of China.

The central government has rolled out a series of measures to offset the negative impact including cutting interest rates, reducing or exempting tax and fees, issuing favorable policies for companies including airliners to sell bonds and raise funds in the stock market to replenish capital.

Investors on the Chinese mainland have been cheered by the easier monetary and fiscal policies. The benchmark Shanghai Composite Index recovered earlier losses and rose by 1.84 percent to close above the psychologically important level of 3,000 points on Thursday.