Lai See

PUBLISHED : Wednesday, 24 June, 2009, 12:00am
UPDATED : Wednesday, 24 June, 2009, 12:00am

Insulated in Wong probe, Gome shares all charged up

After a seven-month trading suspension, shares of Gome Electrical Appliances Holding zoomed up nearly 70 per cent yesterday.

Not bad, considering that former chairman Wong Kwong-yu, who remains the controlling shareholder, is still under investigation for alleged economic crimes.

Despite the mainland's No1 home electronics distributor resuming trading on a bad day (global equity markets fell between 2 and 3 per cent), shareholders were cheered by the HK$3.24 billion capital injection deal struck with United States private equity firm Bain Capital.

In a public letter, Gome offered its gratitude to Bain, its bankers and staff over the difficult past months. More strangely, it also saluted the Beijing Municipal Public Security Bureau for its support.

'In handling the case of Wong Kwong-yu, the bureau showed its regard for Gome's stability, its staff and society's harmony,' the letter read, adding that the bureau had maintained regular dialogue with the senior management and helped solve some operational problems.

Chairman Chen Xiao told the South China Morning Post that the bureau conveyed an important message from the central government that the investigation was targeting Mr Wong personally, not the listed company.

So the bureau deserved a special thank you for its public service? Somehow we doubt Mr Wong, China's richest tycoon on paper, would agree.

Flight of the Phoenix

Call of the day: Credit Suisse analyst Lu Shanshan, who upgraded Gome to 'outperform' in a report titled 'Can this Phoenix return?'

She claimed the worst could be over for Gome and changed her target price to HK$2 from the previous 35 HK cents. The shares closed yesterday at HK$1.89.

Oil's well for Cathay

Amid a gloomy aviation outlook, there is one surprising bright spot for Cathay Pacific Airways - high oil prices.

According to analysts who attended the airline's trading update, Cathay could book some exceptional gains on oil-hedging contracts it made last year. They expect Cathay to write back HK$1 billion during the interim period and probably HK$4 billion for the whole year - if oil prices stay at the current level.

There is yet another bright spot, suggests UBS analyst Damien Horth, who praised Cathay's new chief financial officer, James Hughes-Hallett (above), for increasing the number of briefings to four (from the previous two, we gathered).

Double happiness

How to surprise your staff on the company's big anniversary?

Richard Branson (below) has given two air tickets to each of his Virgin Atlantic staff for the carrier's 25th anniversary this coming Monday.

Nearly 250 local staff will benefit from his birthday gift.

This was the first time Sir Richard handed out free Virgin tickets to staff, although Virgin staff are entitled to seven tickets every year.

It will be a special week for Virgin passengers, as well. Those flying from Hong Kong to London and Sydney until this Friday may be entitled to a surprise upgrade. We gather there will be about five to 10 lucky passengers upgraded on each flight every day.

Windfall for mansion buyer

The buyer who paid HK$430 million for the Stubbs Road mansion King Yin Lei appears to have hit the jackpot.

The unidentified buyer, who got a piece of land in exchange for the building being declared a monument, could build four two-storey buildings totalling 25,000 square feet at the site, according to a Buildings Department document.

The market value of the site could be more than HK$1 billion, according to property surveyors.

In July 2007, a property buyer - rumoured to be CC Land chairman Cheung Chung-kiu - acquired King Yin Lei, the 70-year-old Chinese mansion, but the sale was halted because of concerns the cultural heritage value of the site could be under threat.

A year later, the government offered a land exchange to the buyer and planned to develop the original site as a tourist spot.

Many property developers were eyeing the sale of King Yin Lei, but only a few came forward amid fears that the deal would be blocked or held up. It has taken them by surprise how efficient the government has been in making a settlement.