China: Conglomerate Fosun International sells its entire remaining stake in Tsingtao Brewery
Chinese conglomerate Fosun International has sold its entire remaining stake in the maker of Tsingtao beer for HKD4.1 billion (USD523 million), Yicai Global reported on May 31.
Three Fosun affiliates entered a deal with UBS Hong Kong to sell the 66.8 million Hong Kong-listed shares they held in Tsingtao Brewery to the Swiss investment bank, Shanghai-based Fosun said in a bourse filing today. The deal was priced at HKD62 (USD7.90) a share, a discount of 4.7 percent on yesterday’s closing price of HK65.05.
Tsingtao Brewery’s stock climbed 4.2 percent today to end at HKD67.80 (USD8.64), after earlier jumping by as much as 5.6 percent. The benchmark Hang Seng Index added 1.4 percent. In Shanghai, Tsingtao rose 2 percent to CNY92.75 (USD13.93).
Fosun became the fifth-biggest investor in Tsingtao Brewery in December 2017 after acquiring 243 million of its Hong Kong stock for HKD6.6 billion from affiliates of Japan’s Asahi Group. Since 2020, Fosun has been paring its holding in the brewer, whose brands include Tsingtao, Great Ocean, and Huiquan, and has turned attention to spirit makers by buying into Jinhui Liquor and Shede Spirits.
Fosun’s equity divestment should not have a major impact on Tsingtao Brewery’s operations, China Securities Journal reported today, citing analysts. Fosun may be seeking more affordable assets as the Qingdao-based brewer's shares have been trading high lately, they added.
Tsingtao Brewery’s earnings have gained amid the Covid-19 pandemic. In the first quarter of this year, net profit jumped 10 percent to CNY1.1 billion (USD165.2 million) on a 3 percent gain in revenue to CNY9.2 billion. Last year, net profit surged 43 percent to CNY3.2 billion, while revenue jumped 9 percent to CNY30.2 billion (USD4.5 billion).
Shares of Fosun International rose 3.5 percent on May 31 to finish at HKD7.98 (USD1).
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