Conch firms soar on shakeup

Bya897204973

Updated Wed, 31 Dec 2014 11:42:50 GMT

Shares of Conch-related companies including Anhui Conch Cement (0914) jumped after resuming trading following an announcement of a restructuring plan.

According to the plan, the 51 percent equity in Conch Holdings held by Anhui Investment will be directly transferred to Conch Cement and Conch Profiles, resulting in the simplification of organizational structure.

The rest of the asset will be combined into China Conch Venture (0586) through its wholly-owned subsidiary.

This equity reform shows that Anhui Holdings is planning to be entirely listed.

Shares of Conch Cement soared 6.03 percent to close at HK$28.15 after the trading resumption yesterday while those of Conch Venture jumped 12.9 percent to HK$16.8.

Currently, Anhui Investment and Conch Venture are holding 51 percent and 49 percent of Conch Holdings, respectively.

The reform does not cause a large asset restructuring or stock issuance of Conch Cement.

A report by Deutsche Bank said this equity reform will increase Conch Venture's transparency and act as a further motivation to the employees. Also, workers will receive dividends directly.

It is believed that after the reform, the dividend payout ratio will go up from 20 percent to 30 percent.