(Yicai) March 13 -- Shares of China Risun Group dropped after the world's largest producer and supplier of coke said it plans to acquire a controlling stake in struggling manufacturer of fuel cell systems SinoHytec through an asset swap.

Risun [HKG: 1907] tumbled 5.6 percent to HKD2.69 (35 US cents) a share as of 3.15 p.m. in Hong Kong today, despite opening up 14.4 percent.

Risun plans to exchange its 100 percent equity in unit Risun Hydrogen Energy for shares in SinoHytec, the Beijing-based company announced yesterday. It will also subscribe to newly issued shares of the target firm worth up to CNY550 million (USD76 million), it added.

The shares of SinoHytec included in the deal are priced at CNY18.53 (USD2.56) each, while the final pricing for the 100 percent equity of Risun Hydrogen Energy has not been determined yet, Risun noted, adding that after completing the transactions, it will hold an up to 30 percent stake in the target company.

SinoHytec's shares [SHA: 688339] closed 8.1 percent higher at CNY26.20 apiece in Shanghai, after earlier jumping by the 20 percent daily limit. The stock had been suspended from trading since Feb. 27 due to the planning of a major event. Its Hong Kong-listed shares [HKG: 2402] plunged 11.9 percent to HKD27.85 (USD3.58) each after surging 13.1 percent yesterday.

In a separate announcement yesterday, SinoHytec said that Risun Hydrogen Energy will become its subsidiary after the transaction, bringing a synthetic ammonia production line with an annual capacity of 100,000 tons and several operational and under-construction high-purity hydrogen and liquid hydrogen production lines. The move will help enhance its upstream hydrogen energy supply chain, it added.

Due to the high investment required for hydrogen fuel cell research and development and because it is still in the early stages of commercial application, SinoHytec has incurred losses for five consecutive years. Its net loss expanded 86 percent to CNY453 million last year from the prior one, while its revenue tumbled 54 percent to CNY367 million, according to its latest financial report.

Established in 2012, SinoHytec went public on Shanghai's Nasdaq-style Star Market in August 2020, becoming the first Chinese hydrogen fuel cell manufacturer to complete an initial public offering. It listed on the Hong Kong market in January 2023.

Founded in 1995, Risun has an annual production capacity of 20.8 million tons of coke and 6 million tons of chemical products, according to its website.

Editor: Martin Kadiev