Beijing Enterprises Water Group Ltd. (371), the sewage treatment unit of Beijing Enterprises Holdings Ltd. (392), climbed the most in more than three years after agreeing to a reduced price for assets it’s acquiring from its parent.
Beijing Enterprises Water agreed in January 2011 to issue new shares at HK$1.9788 to its parent for sewage treatment and water supply assets. The companies yesterday said they would lower the placement price to HK$1.62 apiece, according to a statement to the Hong Kong exchange.
“We expect the transaction to be completed now that the two sides have agreed on a share-placement price,” Elaine Wu, an analyst at JPMorgan Chase & Co., wrote in a research note. The asset injection will be “value-accretive” for Hong Kong- based Beijing Enterprises Water, said Wu, who raised the stock’s rating to “overweight” from “neutral.”
Beijing Enterprises Holdings owns a 44 percent stake in the water-treatment operator, according to data compiled by Bloomberg.
Beijing Enterprises Water shares have fallen 26 percent this year compared with a 6.1 percent Hang Seng Index gain. The company had 65 sewage treatment plants and eight water supply facilities in China as of December, according to its annual report.
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