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.
The shares jumped 16 percent in Hong Kong trading to HK$1.57, their highest in seven weeks and most since March 2009, topping the benchmark Hang Seng Index’s 1.7 percent gain.
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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