Jardine Fleming Investment Management yesterday said it had bought more than 10 per cent of the H shares issued by Harbin Power Equipment.
Jardine Fleming told the stock exchange it had acquired 47.91 million or 10.21 per cent of Harbin's H shares.
Harbin Power is a Chinese state-owned company that produces a range of electric power generating equipment for power stations.
Analysts questioned the wisdom of the purchase, saying Harbin's outlook remained uncertain given the tight credit conditions in China.
Last month, Harbin said 1996 net profit tumbled 30.7 per cent to 84.53 million yuan (about HK$78.94 million) after the mainland government delayed many power projects to curb inflation.
'The firm faces a lot of competition and demand is not picking up fast,' an analyst at a British brokerage said.