China Resources Logic plans to sell its compressor business to its controlling shareholder for HK$1.17 billion in cash so the company can focus on semiconductor production.
The company expects to book a HK$63.7 million gain for this year from the sale but will not pay a special dividend to shareholders and instead reinvest the proceeds into the computer chip business.
'It is the final stage of the execution of our strategy to become a single-business entity focusing on semiconductor operations,' said Zhu Jin-kun, chairman of CR Logic.
CR Logic is making chip production its only core business as it expects demand for its low-end chips to keep rising. It said in March that it would invest HK$750 million in expanding the business.
'Our semiconductor business, riding on the double-digit growth rate of China's semiconductor market, has been growing rapidly in recent years,' said Mr Zhu. 'The trend is expected to continue in the foreseeable future.'
The company, a unit of mainland conglomerate China Resources Holdings, sold its information technology business in 2003 and office furniture business in 2005.