- China Wuyi Co. (000797.SZ) plans to issue 88.5 million shares at RMB 16.26 per share to raise RMB 1.4 billion through a non–public offering, according to Sohu.
- Shares of China Wuyi Co. will resume trading on November 21.
Why It Matters:
- China Wuyi plans to use the funds in its overseas real estate business. China Wuyi will build a production plant in Kenya. The company suggests the project is in line with the Chinese government’s “One belt, One road” strategy and it expects the project to boost its profits.
- In terms of the “One belt, One road” strategy, some analysts suggest it is too difficult to implement. Unless China Wuyi’s project is government backed, the attendant risks should be a major consideration for investors.
- China Wuyi’s two major businesses are real estate and overseas construction. In the third quarter, the company posted a 83% decline in net profit and attributed this to the fact that the firm did not consolidate pre-sales into revenue.