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Investing.com – China Huarong Asset Management Co. Ltd.’s Hong Kong shares had a hard fall on its first trading day resuming from a nine-month suspension.
The shares dived 52.94% to HK$0.480 ($0.076) by 11:49 PM ET (4:49 AM GMT), a record low since China Huarong debuted on the Hong Kong Stock Exchange in October 2015.
The company, one of four state-owned bad-asset managers, halted trading in its shares in April 2021 after missing its Mar. 31, 2021 deadline to file its 2020 earnings. After that, it reported in August 2021 a profit of CNY158.3 million ($24.9 million) for the first six months of 2021, compared with a loss of CNY106.274 billion in 2020.
The share trading resumption came after its announcement in November that a recapitalization of CNY42 billion, or $6.6 billion, from a group of state-back investors led by Citic Group. Citic Group is now China Huarong’s second-largest shareholder after China’s Ministry of Finance.
China Huarong said in its announcement that it had fulfilled the requirements to resume shares trading, including the disclosure of all material information on its business, financial performance, and operations.
The company also announced a series of divestments, including stake sales in its consumer finance, securities, and bad asset exchange business to strengthen its core business.
Meanwhile, some investors were of the view only way from such a hard fall is up.
With the fall expected given the long suspension, “the worst is over, and the stock price needs time to go into an uptrend as investors need to evaluate its future developments, which are still unclear at present,” Emperor Securities analyst Stanley Chan told Bloomberg.
