2010年5月22日星期六

Denway Motors Falls a Second Day in Hong Kong Trading

"Denway Motors Falls a Second Day in Hong Kong Trading | AboutHK.Com - More Information About HK"

Bloomberg

Denway Motors Falls a Second Day in Hong Kong TradingDenway Motors Ltd., the Chinese partner of Honda Motor Co., fell a second day in Hong Kong trading after Guangzhou Automobile Group Co. offered stock to buy the 62 percent of Denway it doesn’t already own.

Denway fell 5.3 percent to close at HK$3.23 today. The shares plunged 24 percent yesterday as trading resumed after the stock was suspended last month.

Guangzhou Auto plans to seek its own listing after taking Denway private, strengthening its ability to raise funds and compete with rivals including Dongfeng Motor Group Co. and China FAW Group Corp. Denway fell after the deal valued closely held Guangzhou Auto’s stock at a higher price to earnings ratio than other Chinese carmakers.

“Investors are disappointed by their share swap plan,” said Zhang Jing, an analyst at Philip Securities (HK) Ltd. in Shanghai. “On top of that, automakers have been falling and Denway is simply no exception.”

Guangzhou Auto is offering to swap 0.37861 share for each Denway share, valuing the listed company at as much as HK$41.2 billion ($5.3 billion) or HK$5.16 to HK$5.49 per share.

While that’s as much as 20 percent more than the last traded price of Denway stock before trading was suspended on April 28, the bid values Guangzhou Auto stock at 12.5 times to 13.5 times forecast earnings for 2010.

Geely Automobile Holdings Ltd. trades at a prospective price-earnings ratio of 10.9, Great Wall Motor Co. at 8.7 times and Dongfeng Motor Group Co. at 8.9 based on today’s closing prices.

Dongfeng., the biggest Chinese automaker traded in Hong Kong, fell for a second day. The company declined 3.6 percent to HK$8.65 today. Geely was down 3.9 percent, while Great Wall traded 4.4 percent lower.

--Tian Ying. Editor: Ian Rowley, Aaron Sheldrick.

To contact the editors responsible for this story: Kae Inoue at kinoue@bloomberg.net

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