Celestial Asia shares surge on asset sale plan

PUBLISHED : Saturday, 14 March, 2009, 12:00am
UPDATED : Saturday, 14 March, 2009, 12:00am

Shares in Celestial Asia Securities Holdings surged as much as 35.23 per cent yesterday as the company said it was in talks to sell assets.

The stock jumped to a high of HK$1.19 before closing at HK$1.13, up 28.41 per cent.

'Other than a possible disposal of assets, which is still under preliminary negotiation, there are no negotiations or agreements relating to intended acquisitions or realisations that are disclosable,' the company said in a filing with the stock exchange yesterday afternoon, after the share price shot up in the morning.

The principal business of Celestial Asia includes financial services through subsidiary CASH Financial Services Group, online game services and investment holding.

'Investors are worried about financial service providers' cash situation amid the deepening financial crisis, so if [Celestial Asia] can raise cash by selling assets, it will be good news,' said Yiu Chin, a director of financial analysis at Altruist Financial Group.

Celestial Asia and Hong Kong-listed CASH have been hit hard by the recent market meltdown, as investors have stepped to the sidelines. The two firms issued a warning in December that profits for the past year would decline substantially.

Another analyst said Celestial Asia would probably sell the online game business, as it had no other non-core assets to offload.

In November last year, the company paid HK$38 million for a 3.4 per cent stake in the online game unit that it did not already own, making that operation a wholly owned subsidiary.

In December, Celestial Asia announced a plan to sell its retail business - the furniture and household items chain shop Pricerite - to CASH in a bid to diversify its income sources and alleviate the pain it was suffering from the financial crisis.

CASH shares closed up 3.99 per cent at 60 HK cents yesterday.

Slimming down

The online game business is the likely asset to be sold

Celestial Asia shares closed at HK$1.13 yesterday, an increase of: 28.41%