Property developer Shenzhen Investment (HKG:0604) agreed to sell its entire 70% stake in Jinghua Electronics to its associate Shahe Industrial (SHE:000014) for 273.8 million yuan in cash, according to a Hong Kong bourse filing Friday.
Shares of the Shenzhen Investment gained over 2% in morning trade in Hong Kong on Monday, while shares of Shahe Industrial jumped nearly 10% in Shenzhen.
The stake sale to Shahe Industrial comes with a net profit guarantee of 37.2 million yuan, 40.3 million yuan, and 43.6 million yuan for 2026, 2027, and 2028, respectively.
Shenzhen Investment expects to record a pre-tax gain of around 79 million yuan from the disposal, which it plans to use for working capital.