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It on October 10 inked a contract to subscribe not more than 71 million additional shares of the Chinese commercial lender at CNY 11.63 per share. After the subscription, it will hold 250 million shares of the bank, accounting for 8.47 percent of the latter's capital stock.
In addition to garment manufacturing, the group has stretched out reach to real estate development and the domestic capital market. As at the end of June 2009, it controls approximately CNY 7.53 billion worth stake in 10 listed companies including CITIC Securities Co., Ltd. (SHSE: 600030) and Haitong Securities Co., Ltd. (SHSE: 600837).
As an original shareholder of CITIC Securities, it gained about CNY 3.3 billion via selling stake in the broker and obtaining bonus from it as at the end of 2008. In the first half of this year, it captured CNY 853 million via selling stake in the latter.
However, the group also suffered from such investments. It spent CNY 3.59 billion on subscribing 100 million additional shares of Haitong Securities at the end of 2007. Hurt by recession on the domestic stock market, the shares once reached a record low of CNY 7.16 apiece, compared to its cost of CNY 17.94 per share. In the fourth quarter of last year, it sold 54.37 million such shares, from which it suffered a loss of CNY 470 million. As at the end of June 2009, it still held 67.51 million such shares.
Despite of the loss, the group shows rising interest in the capital market. According to a statement it released on September 25, it subscribed 106 million additional shares of Shanghai Pudong Development Bank (SPD Bank and SHSE: 600000) at CNY 16.59 per share. The shares, with a 12-month lockup period, cost it approximately CNY 1.76 billion.
The aim for Youngor to subscribe additional shares of the two banks is to invest, said Chen Jiwu, general manager of V-Stone Investments. Banking shares traded on the domestic stock market are under valued. For instance, the shares of Industrial and Commercial Bank of China (ICBC, SHSE: 601398, and SEHK: 1398) traded on the Hong Kong stock market is higher than those traded on the Shanghai stock market, currently.
(USD 1 = CNY 6.83)
Source: www.hexun.com (October 14, 2009)
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