China Huarong Asset Management falls 50% as trading resumes after 9-month halt

[HONG KONG] Shares of China Huarong Asset Management Co plunged as much as 50 per cent in Hong Kong on Wednesday (Jan 5) to a record low, as trading resumed after a 9-month suspension, giving investors the chance to revalue the embattled company.

Shares were last trading at HK$0.52, the lowest since the company debuted in October 2015.

Huarong, 1 of 4 state-owned distressed-debt managers, halted trading in its shares in April 2021 after missing a Mar 31 deadline for filing its 2020 earnings, sparking a rout in its US dollar-denominated bonds that spread to other Chinese issuers.

In August, Huarong, which counts China's finance ministry as its largest shareholder, announced a first-half 2021 profit of 158.3 million yuan (S$33.8 million) and a nearly US$16 billion loss for 2020.

Wednesday's share trading resumption follows Huarong's announcement in November that it would receive fresh capital worth 42 billion yuan from a state consortium led by Citic Group as part of a restructuring plan.

Huarong has also announced a slew of asset divestment deals, including stake sales in its consumer finance, securities and distressed asset exchange businesses, amid a regulatory push to sell non-core assets in its business revamp.

The company said it applied to resume trading as the resumption guidance had been fulfilled, including the disclosure of all material information on its business, financial performance and operation in its results.

REUTERS