Shandong Xinhua Pharmaceutical is to buy back up to 10 per cent of its 150 million H shares to enhance its per-share net asset value.
The plan announced yesterday will go ahead after it secures regulatory approval to issue 30 million new A shares in the Shenzhen stock market.
Its A shares are now trading at about 14 yuan (about HK$13.11), a substantial premium to yesterday's closing price for the H shares of HK$1.10, which is below the per-share net asset value of 2.18 yuan.
The company said it expected to raise about 450 million yuan from the A-share issue and would use the proceeds to finance the development of new products, upgrade technology and expand its production and sales network.
It made the announcement after posting a 17.27 per cent gain in net profit to 67.82 million yuan for the year ended December 31, despite falling prices for the company's products.
The gain was due to a 16 per cent increase in sales of new products and a higher proportion of new products in sales. Exports also increased to US$47 million last year, compared with US$39.56 million in 1999.
