Hongta Group to withdraw investment in Yunnan Baiyao
Shanghai. August 14. INTERFAX-CHINA - China's largest tobacco product maker Hongta Group will relinquish all its shares in Shenzhen Stock Exchange-listed Yunnan Baiyao Group Co. Ltd., Yunnan Baiyao announced on Aug. 14.
According to the announcement, Hongta Group, Yunnan Baiyao's second-largest shareholder since 1999, currently holds 65,813,912 shares, equivalent to a 12.32 percent stake in Yunnan Baiyao. It is seeking to sell its entire stake in Yunnan Baiyao to an interested investor within this year.
In a Securities Daily report on Aug. 14, Yin Pinyao, general manager of Yunnan Baiyao, was quoted as saying that Hongta Group plans to concentrate its investment in main business areas, as such gradually reducing investments in non-key industries.
"Only very strong companies with deep pockets will be able to take over Hongta Group's stake in Yunnan Baiyao," Wang Xi, an analyst from Xingye Securities, told Interfax.
"However, as with all shareholder changes, we do not expect the change to have much of an impact on Yunnan Baiyao's daily operations," Wang added.
From 1999 to 2008, Yunnan Baiyao recorded a combined net profit of RMB 1.84 billion ($269.40 million). Hongta Group's income from equity investments attributable to Yunnan Baiyao during the period would approximately stand at over RMB 300 million ($43.92 million).
Yunnan Baiyao's share price closed at RMB 36.6 ($5.36) on Aug. 14 in Shenzhen, down 0.62 percent from the previous trading day.