China High Speed shares surge as shareholders back share swap offer from Fullshare
Deal allows Nanjing tycoon Ji Changqun to gain control of China’s largest maker of gearboxes for wind power turbines
But shares of Fullshare, which derives most of its profit from property development and also from building energy conservation projects and medical devices and services supply, have fallen after the shares tender result was announced. They had more than doubled in the past year.
Investors appear to be making decisions on whether to accept the offer and on how to trade the companies’ shares for short term profit considerations, given that little is known about the long term business outlook of Fullshare, according to Pierre Lau, head of Asia-Pacific utilities research at Citigroup Global Markets Asia, who was surprised by the result.
“The company [Fullshare] has no analyst coverage and appears not to be familiar to most institutional investors,” he said in a note on Tuesday.
Lau has a HK$9.3 target price for China High Speed, which closed Tuesday 4 per cent higher at HK$8.91, taking its accumulative gain since the offer was announced on September 19 to 19.3 per cent.