Biostime Plummets on Price-Fixing Investigation: Hong Kong Mover
Biostime International Holdings Ltd. (1112) declined the most in almost two years after the Chinese baby-care products provider announced one of its units was under investigation for alleged anti-monopoly law violations.
The pediatric nutrition maker dropped as much as 10 percent, headed for the biggest drop since August 2011, to HK$42.15, before trading at HK$43.05 as of the midday break in Hong Kong. The benchmark Hang Seng Index gained 1.2 percent.
The unit, Biostime (Guangzhou) Inc., is being probed by the National Development and Reform Commission for allegedly managing prices in the market in violation of the anti-monopoly law, the parent said yesterday in a statement to the Hong Kong stock exchange. The case comes after Kweichow Moutai Co. (600519) and Wuliangye Yibin Co. (000858)’s units were fined in February for setting minimum retail prices.
“We believe Biostime’s future sales prospects are promising and that its competitive advantage remains intact, though the concern about a potential fine and punishment may be overhang in the near term,” Jacqueline Ko, a Hong Kong-based analyst at Kim Eng Securities (HK) Ltd., said today in a note. She reiterated a buy rating on the stock.
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