Liu's return sees China Gas soar
Stock of mainland gas supplier has risen so much it is now unattractive, analysts say, just months after the managing director rejoins the firm
Liu Minghui has not disappointed the market since he was reinstated as managing director of China Gas in August.
But after soaring 35 per cent in the past month, the company's shares had become unattractive, analysts said.
Two months after Liu retook the helm, the firm, one of the mainland's largest gas distributors, signed a preliminary agreement with former hostile takeover bidder China Petroleum & Chemical (Sinopec) on potential joint ventures in liquefied petroleum gas (LPG) retailing and vehicle and vessel liquefied natural gas refuelling.
Liu was previously removed from the board while being investigated for alleged embezzlement of the company's assets. However, Shenzhen police decided not to prosecute because of a lack of evidence.
The deal with Sinopec came on the same day as the takeover bid by Sinopec and ENN Energy, a rival of China Gas, lapsed.
Some analysts believe an LPG joint venture is unlikely, given that LPG distribution is an unattractive business, and wonder if the framework co-operation agreement is a face-saving exercise after the hostile bid collapsed. Others say the vehicle and vessel refuelling venture could be lucrative, as it is expected to be a high-growth business.