Estun Automation Co.,Ltd. (HKG: 02715) shares surged more than 7% in Hong Kong trading. At the time of writing, the stock was up 7.68% to HK$22.72, with a turnover of HK$541 million.

The rally follows the company's recent announcement forecasting a significant increase in its first-half net profit. Estun expects net profit for the period to reach between 1.5 billion yuan and 1.8 billion yuan, representing a year-on-year growth of 2,144.74% to 2,593.68%.

The company attributed the expected strong performance to several key factors. These include an optimized product mix, cost reduction and efficiency improvements leading to higher gross margins, a decrease in the period expense ratio, and an increase in non-recurring gains and losses following the completion of an asset restructuring at its associate company, Nanjing Gongyi.

Earlier this month, Estun announced that its wholly-owned subsidiary, Estun Robot, along with Dingtong Electromechanical, plans to acquire 100% equity in Estun Cool Drive in an all-cash deal. Upon completion, Estun Cool Drive will be consolidated into the group's financial statements.

It is noted that the acquisition is currently in the preliminary planning stage. Specific terms have not yet been finalized, and no binding agreements have been signed.