AS a group of companies withdrew from the recent acquisition of a controlling stake in mainland companies, investors dumped shares of Shell Electric yesterday fearing a fall in the profit forecast.
The industrial stock was the worst performer yesterday. Its price plunged 20 per cent to close down 67.5 cents at $2.70.
Turnover in the counter was $17.43 million.
Investors were worried that the company's profit forecast for the year could not be realised as they had already taken into account the possible revenues from these joint ventures, said Seapower Securities research director Samuel Lau Kwok-leung.
After negotiations, the associated companies - 50 per cent each owned by Shell Electric and its major shareholder, the Yung family - decided to pull out from the acquisition of the companies in Guangdong province.
Shell Electric said the decision was based on poor prospects for the ventures in the competitive domestic air-conditioner market.
However, talk had it that the transfer of a 60 per cent controlling stake in each of the companies to the Hong Kong-based Shell Electric could not secure approval from the authorities.
