Sound Global Slides After Moody’s Profit-Margin Report

Sound Global Ltd., a Chinese wastewater-treatment company, fell to a seven-week low in Hong Kong trading following a Moody’s Investors Service report on its profit margin and revenue growth.

The stock retreated 3.5 percent to HK$7.22, the lowest close since Feb. 6, adding to a 5.1 percent slump yesterday. The shares, which surged to a record earlier this month, have now gained 64 percent this year.

“The decline may be due to profit-taking of investors while fundamentals of the company look positive,” Evan Li, a Hong Kong-based analyst at Standard Chartered Plc, said today by phone.

Revenue climbed 18 percent in 2013 from a year earlier. Sound Global sales from its water and water-treatment solutions business are expected to increase about 15 percent this year on China’s demand for environmental protection and infrastructure improvements, Moody’s said.

The company, established in 2005, on March 25 reported a 2013 profit of 423.3 million yuan ($68 million), almost unchanged from 2012. Results “show no change in profit-margin while achieving considerable growth” in revenue, Lu Chenyi, an analyst at Moody’s in Hong Kong, said in a note yesterday.

— With assistance by Feifei Shen

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