China Southern Airlines' share price slipped 6.08 per cent to $2.70 yesterday after it announced a 500 million yuan investment via a mainland securities house. The H share agreed to appoint Beijing-based Centergate Securities to manage 500 million yuan for the next year, according to an announcement filed to the Hong Kong and Shanghai stock exchanges. 'By entering into the Assets Management Agreement ... the board intends to raise the utilisation rate of the company's capital, and to improve both the investment return and the profits of the company,' the carrier said. A Hong Kong-based analyst said it was a 'bizarre investment', as China Southern was never a cash-rich company. Relocating its hub to the new Guangzhou Baiyun International Airport would require money, so would its fleet expansion plan, he said. 'I wonder why they use their limited cash for an investment like that. It's risky,' the analyst said. Under the agreement, if the investment return is above 6 per cent, Centergate will be given an asset management fee which will be as much as 60 per cent of the amount in excess of the 6 per cent return. If the investment return falls below 6 per cent, no management fee will be paid. Centergate booked a loss of 28.14 million yuan in the first half, according to a mainland-based broker. China Southern had 2.08 billion yuan cash on hand at the end of last year. Its net debt to share equity ratio was 123.94 per cent at that time. Management from the Guangzhou-based carrier could not be reached for comment yesterday.