Gome Electrical Appliances Holding, controlled by China's richest man Wong Kwong-yu, saw its stock soar as much as 33.88 per cent yesterday following the announcement of a US$150 million share deal with Warburg Pincus Private Equity. The counter reached an intraday high of $8.10 before closing at $7.35, up 21.48 per cent on the $6.05 before it was suspended from trading on January 27. 'The transaction showed a vote of confidence from a leading global private equity investment fund to Gome. The positive news will spark a wave of buying sentiment in the short term,' said Anthony Teoh, a research director at South China Brokerage. He expects Gome to speed up plans to buy out the remaining 35 per cent held by its chairman in Beijing Gome Appliances, China's largest electronics retailer. 'With a complete control of the Gome chain, it will simplify the company's structure,' Mr Teoh said. Jenny Chan, an analyst at SHK Financial, said the introduction of a strategic investor would help improve Gome's corporate governance as Warburg would appoint a non-executive director to the board. 'The deal can also enlarge Gome's shareholder base,' she said. Mr Wong has committed to grant a call option to Gome to acquire his privately held unlisted retail assets by 2011. Cazenove analyst Kenneth Ma wrote in a research report that 'Warburg Pincus would likely be interested in participating in Gome's future funding requirement, including the acquisition of the chairman's 35 per cent stake [in Beijing Gome]'. But most analysts said the deal would not have a big impact on earnings, and they would maintain their profit forecasts for Gome. Ms Chan projects a net profit this year of 597 million yuan, up from last year's estimated 482 million yuan.