Yunfeng Financial Group (00376.HK) saw its stock price plummet by 10.64% in early trading on Tuesday, following the company's announcement of a discounted share placement and top-up subscription plan. The sharp decline reflects investors' concerns about potential dilution and the pricing of the new shares.

According to the company's announcement, Yunfeng Financial has entered into a placement and subscription agreement with its major shareholder, Jade Passion Limited, and placing agents. The agreement involves the placement of 191 million existing shares at HK$6.10 per share, representing a significant discount of approximately 16.8% to the stock's last closing price of HK$7.33. Following the placement, Jade Passion Limited will subscribe to an equal number of new shares at the same price.

The placement shares account for about 4.95% of Yunfeng Financial's existing issued share capital and approximately 4.71% of the enlarged share capital after the subscription. The company expects to raise gross proceeds of around HK$1.17 billion and net proceeds of approximately HK$1.15 billion from this transaction. While the discount and potential dilution have negatively impacted the stock price, investors will be closely watching how the company utilizes these funds to drive future growth and value creation.