Changhong to bid for 29.9pc stake in Huayi
Taking another step towards diversification, Sichuan Changhong Electric, one of the mainland's largest television makers, said it would bid for a 29.92 per cent stake in Shenzhen-listed Huayi Compressor.
After becoming the largest single shareholder of refrigerator and air-conditioner maker Hefei Meiling in August, the Shanghai-listed company notified the Shanghai Stock Exchange yesterday that it would bid for 97.1 million Huayi shares through an auction to take control of the maker of core air-conditioning and refrigeration components.
Changhong did not mention the value of the bid.
Huayi's shares strengthened 300 per cent in the past year, closing at 10.42 yuan on December 14 before trading was suspended. Based on that share price, the stake for sale in the auction is worth 1.01 billion yuan.
This year, Sichuan-based Changhong has made a number of moves to broaden its product mix. In June, it sold a 0.8 per cent stake to Microsoft, the world's biggest software maker, to strengthen ties for the joint development of internet-enabled television.
In August, it bought 82.9 million shares, or a 20 per cent stake, in Hefei Meiling for 175.6 million yuan.
Changhong has posted 50 per cent growth in first-half net profit to 192.7 million yuan from a year earlier. Sales rose 30 per cent to 10.6 billion yuan on strong growth in flat panel televisions.
Huayi Compressor, which designs and manufactures non-freon compressors, reported in October a 43 per cent increase in revenue to 2.04 billion yuan for the first nine months, from a year earlier.
It posted a net loss of 13.38 million yuan, compared with a loss of 14.64 million yuan in the same period last year.
Its parent Huayi Electrical Appliance General was ordered by a court earlier this month to sell some Huayi shares to repay debts owed to the government of Jingdezhen in Jiangxi province.
Shares in Sichuan Changhong, suspended from trading yesterday, closed at 8.45 yuan last Friday.
