Hubei Yihua Chemical Industry (SHE:000422) plans to merge by absorption with its wholly owned subsidiary, Hubei Yihua Trading, according to a Shenzhen bourse filing on Tuesday.

The decision was taken to optimize Hubei Yihua Chemical Industry's management structure and lower management costs, the filing said.

Upon completion of the absorption-type merger, Yihua Trading's legal entity status will be canceled, with all its assets, claims, debts, personnel and other rights and obligations assumed by Hubei Yihua. No consideration will be paid for the merger, it said.

Hubei Yihua Chemical Industry's name, business scope, registered capital, equity structure, board and senior management will remain unchanged, the filing said.

Shares of Hubei Yihua Chemical Industry rose more than 1% in recent trade.