Red chip China Resources Enterprise has sold its stake in a food and beverage producer for 432.2 million yuan as part of its drive to focus on its core business - selling consumer products on the mainland. The disposal of a 25.09 per cent stake in A share Xuzhou VV Food and Beverage by the group's wholly owned food and processing arm, Ng Fung Hong, boosted its total gain from a string of disposals of non-core assets over the past six months to $850 million. The disposals are part of the conglomerate's concerted effort to secure a bigger slice of the mainland's consumer-product market. The conglomerate's presence is largest in eastern China, through Suguo and CRVanguard supermarkets. Ng Fung Hong, the largest importer of fresh food and frozen meat to Hong Kong, signed an agreement to sell all of its 82.8 million non-floating legal shares in Xuzhou VV Food and Beverage to an independent investor, Otsuka Pharmaceutical, for 5.22 yuan per share. Xuzhou VV Food and Beverage, which produces and distributes fresh milk, soyamilk, flour oatmeal and beverage products, had net assets of 1.41 billion yuan at the end of last year. The sale price represents a price-earnings ratio of about 19 times the company's earnings of 90.5 million yuan last year. China Resources Enterprise chairman Charley Song Ling said the group's investment in the firm had generated a satisfactory return over the past five years. When it went public in 2000, Ng Fung Hong recognised a gain of $172.2 million. 'Coupled with the sale of our 40.5 per cent stake in Qingdao Qirun, which operates some oil factories in Qingdao, for 480 million yuan in two tranches, the group has already realised more than $850 million from the disposal of these non-core investments in the past six months,' Mr Song said. He said last week that more divestments of non-core assets were in the pipeline, including 40 petrol stations in Hong Kong and the mainland.
