Sino Biopharm Drops Most In Two Years on China Cinda InvestmentBloomberg News
Chinese drug developer Sino Biopharmaceutical Ltd. plunged the most in more than two years in Hong Kong trading after agreeing to pay 4.9 billion yuan ($744 million) for shares in China Cinda Asset Management Co.
Sino Biopharm fell as much as 16 percent to HK$5.60, the biggest intraday drop since September 2013. The stock traded 12 percent lower at HK$5.83 at 10:15 a.m. in Hong Kong.
The company will buy 1.9 billion new China Cinda shares for 2.58 yuan each, it said in a statement to the Hong Kong stock exchange today. Sino Biopharm develops and sells modernized Chinese medicines as well as treatments for hepatitis and cardio-cerebral diseases. China Cinda provides distressed asset management and financial services.
"The market doesn’t quite understand the logic for such a transaction between a pharmaceutical company and an asset management firm," said Su Zhang, an analyst at BNP Paribas Securities (Asia) Ltd.
Sino Biopharm in its statement said the share purchase provides a "reasonable investment opportunity" for the company and will help generate "attractive returns" for shareholders. Sino Biopharm didn’t immediately respond to an e-mail seeking comment.
China Cinda shares traded 0.4 percent lower at HK$2.62 at 9:58 a.m. in Hong Kong.
— With assistance by Hui Li