BYD, the mainland's largest maker of rechargeable batteries, said it would book an exceptional gain of more than five times its profit for last year from a separate listing of its handset unit.
The one-off gain would amount to between HK$1.93 billion and HK$6.24 billion, the company said yesterday.
That compares with its net profit of 1.12 billion yuan for last year, which was up 123 per cent from 2005, BYD said in March.
Shares in BYD, which gained 253 per cent over the past year, jumped as much as 7.5 per cent yesterday before closing at HK$48.85, an increase of 5.05 per cent.
'The spin-off of the handset business is necessary and good for BYD as the company needs more cash flow to run its business,' said Michael Meng, an analyst at Citigroup Investment Research.
'Due to strong orders from Nokia as well as the company's aggressive capacity expansion, we have raised BYD's handset component sales forecast this year.'
BYD said it might sell a 25 per cent stake in the handset unit, BYD Electronic, for the proposed initial public offering and keep a 67.35 per cent stake. The remaining 7.65 per cent will be owned by 35 BYD employees.