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Wuhan East Lake Surges on Assets From Shareholder: Beijing Mover

Feb. 21 (Bloomberg) -- Wuhan East Lake High Technology Group Co., which develops and runs an industrial zone in central China, rose the most in a year after saying it would buy construction assets from its largest shareholder.

The shares gained by the 10 percent daily limit to 9.67 yuan as of 1:51 p.m. in Shanghai trading, the biggest increase since February of 2011. China’s benchmark Shanghai Composite Index rose 0.1 percent.

State-owned United Investment Group, Wuhan East Lake’s largest shareholder with 14.36 percent, will sell its Hubei Provincial Road & Bridge Co. unit for not more than 96.4 million new Wuhan East Lake shares priced at 9.55 yuan each, the company said in a statement to Shanghai’s Stock Exchange yesterday after markets closed. Wuhan East Lake’s shares resumed trading today after an almost 10-month suspension.

United Investment will hold 28.3 percent of the company after the transaction, said Wuhan East Lake, which through its subsidiaries also operates pharmaceutical manufacturing and software development businesses.

“This restructuring will maximize the growth of the company’s profitability, resolve business risks, and rebuild the company’s business focus,”according to the statement. The company is based in Wuhan, capital of the central Chinese province of Hubei.

Wuhan East Lake said its 2010 net income fell 75.3 percent to 17.59 million yuan and it accumulated a net loss of 77.14 million yuan in the nine months to September 2011.

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at dloo7@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net

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