Yankuang Energy (HKG:1171) said it plans to spin off its indirect subsidiary Kasong Science and Technology, according to a Monday Hong Kong bourse filing.

Shares of the firm were down over 1% in Tuesday's late-morning trade.

The unit has applied for a quotation on China's National Equities Exchange and Quotations, the filing said.

Kasong, established in 2005, develops and sells industrial lubricants and grease products.

Yankuang said the spin-off will broaden Kasong's financing channels, improve competitiveness, and support the group's high-end equipment manufacturing segment.

The company will retain control and continue consolidating Kasong's financials.