A company whose share price soared after announcement of the Xiong’an New Area has reported plummeting profits in its interim financial report after huge changes to its ownership.
Tangshan Jidong Equipment Engineering Co.’s [SHE:000856] share price leapt more than 200 percent in the second quarter to CNY45.8 (USD6.85) after China introduced plans for the Xiong’an economic zone in northern Hebei province.
The firm’s income grew to CNY877 million (USD219 million) in the first six months, up 73 percent on the year. However, net profits dived 91 percent to just CNY4.9 million (USD722,000).
The decline in earnings was mainly due to a CNY98.5-million (USD14.75-million) reduction in non-recurring gains and losses, the company said earlier in the year. Those gains mainly came from tax rebates and selling shares in one of its subsidiaries, Tangshan Dunshi Machinery Manufacturing Co. It also increased provisions for asset impairment in the first half of this year.
The significant rise in share price saw a number of major shareholders cash out. Only the top two of its the ten largest holders from the first quarter were still around at the end of the second: Jidong Development Group Co. and Tangshan State-Owned Capital Operation Co.