(Bloomberg) — A Chinese language cement producer was within the highlight after it suspended inventory buying and selling Wednesday, following a selloff that almost worn out all its market worth within the ultimate quarter-hour of the earlier session.
Most Learn from Bloomberg
China Tianrui Group Cement Co. stated buying and selling in its Hong Kong-listed shares has been halted from 9 a.m. native time, pending an announcement associated to inside info, in line with an alternate submitting.
Based mostly within the central Henan province, Tianrui’s inventory plunged 99% to about HK$0.05 Tuesday, slicing its market capitalization to HK$141 million ($18 million). Through the selloff, about 281 million shares, or a 3rd of the agency’s free float, modified fingers. Of that quantity, greater than 80 million shares had been traded through the ultimate jiffy of the session often known as the closing public sale.
Tianrui’s abrupt and dramatic inventory rout is a reminder of the dangers related to obscure Chinese language companies with a excessive focus of shareholding and people who interact in financing practices resembling utilizing shares as debt collateral. The loss-making firm’s woes additionally come at a time when an unprecedented housing disaster is inflicting elevated stress among the many nation’s property builders and building companies.
Tianrui’s controlling shareholder Li Liufa and his partner collectively personal roughly 70% of the corporate, in line with a submitting in January. The cement producer additionally introduced at the moment that it pledged 97 million shares, or 3.3% of its whole, to safe a 12-month mortgage of as much as 166.5 million yuan.
The corporate’s investor relations officers couldn’t be reached for remark when contacted by Bloomberg. It additionally didn’t instantly reply to a written request for remark.
Tianrui swung to a internet lack of 634 million yuan ($87.7 million) final yr, from a revenue of 449 million yuan in 2022. It cited weak demand ensuing from China’s property downturn, intensifying market competitors and excessive uncooked materials prices as causes.
Listed in Hong Kong in 2011, the corporate has an annual cement output capability of about 58 million tons, with its enterprise primarily centered on central and northern China, in line with its official web site. It additionally stated its merchandise had been utilized in main home infrastructure initiatives resembling high-speed rail strains.
Most Learn from Bloomberg Businessweek
©2024 Bloomberg L.P.
