(Bloomberg) — A Chinese cement producer was throughout the highlight after it suspended stock trading Wednesday, following a selloff that almost worn out all its market value in the final word quarter-hour of the previous session.
Most Read from Bloomberg
China Tianrui Group Cement Co. said trading in its Hong Kong-listed shares has been halted from 9 a.m. local time, pending an announcement related to inside information, based on an exchange filing.
Based throughout the central Henan province, Tianrui’s stock plunged 99% to about HK$0.05 Tuesday, cutting its market capitalization to HK$141 million ($18 million). Throughout the selloff, about 281 million shares, or a third of the firm’s free float, modified hands. Of that quantity, greater than 80 million shares were traded in the middle of the ultimate jiffy of the session often often called the closing auction.
Tianrui’s abrupt and dramatic stock rout is a reminder of the risks related to obscure Chinese firms with a high concentration of shareholding and folks who engage in financing practices paying homage to using shares as debt collateral. The loss-making company’s woes also come at a time when an unprecedented housing crisis is causing increased stress amongst the various country’s property developers and construction firms.
Tianrui’s controlling shareholder Li Liufa and his spouse jointly own roughly 70% of the company, based on a filing in January. The cement producer also announced in the intervening time that it pledged 97 million shares, or 3.3% of its total, to secure a 12-month loan of as much as 166.5 million yuan.
The company’s investor relations officials couldn’t be reached for comment when contacted by Bloomberg. It also didn’t immediately reply to a written request for comment.
Tianrui swung to a net lack of 634 million yuan ($87.7 million) last 12 months, from a profit of 449 million yuan in 2022. It cited weak demand resulting from China’s property downturn, intensifying market competition and high raw material costs as reasons.
Listed in Hong Kong in 2011, the company has an annual cement output capability of about 58 million tons, with its business primarily focused on central and northern China, based on its official website. It also said its products were utilized in major domestic infrastructure projects paying homage to high-speed rail lines.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.