(Yicai) July 8 -- Shares of Hainan Airlines Holding, which operates China's fourth-largest carrier, rose after the firm said an affiliate plans to buy as much as CNY120 million (USD16.5 million) of its shares in a move aimed at lifting its low stock price, which has put the firm at risk of being delisted.

Hainan Airlines Holding [SHA: 600221] climbed 1.8 percent to close at CNY1.13 (16 US cents) a share today, bringing its market value to about CNY49 billion (USD6.74 billion). The benchmark Shanghai Composite Index fell 0.9 percent.

The stock tumbled about 25 percent last month, heading toward CNY1 (14 US cents). Under Shanghai Stock Exchange rules, companies can be delisted if their stock price closes below CNY1 for 20 straight trading days.

Fangda Carbon New Material intends to buy into Hainan Airlines over the next six months to boost the shares, which are highly undervalued, the carbon products maker said late yesterday. 

Fangda Group Industrial is the parent company of both businesses, it noted, and the investment will be made through wholly owned unit Shanghai Fangda Investment Management. Fangda took control of bankrupted HNA Group's aviation business, which included Hainan Airlines Holding, in December 2021.

Fangda Carbon may buy a maximum of 2 percent of Hainan Airlines over a 12-month period, it pointed out, adding that it previously had no shares in the target company.

Shares of Fangda Carbon [SHA: 600516] ended 2.8 percent lower at CNY4.18 (58 US cents) each.

At the end of last month, Hainan Airlines also announced that American Aviation, acting in concert with its controlling shareholder, bought 2.6 million of its B shares, and will buy more over the next six months, spending between USD5 million and USD10 million. B shares are US dollar-based securities issued by Chinese mainland-listed firms. That move also boosted the share price.

Hainan Airlines Holding turned a profit of CNY300 million in 2023, compared with a net loss of CNY20.2 billion the year before. Revenue surged 156 percent to CNY58.6 billion. 

Editor: Martin Kadiev