(Yicai Global) May 28 -- Shares of Jinhui Liquor surged today after a unit of Fosun International said that the Chinese conglomerate will widen its beverage portfolio by buying a majority stake in the baijiu distiller.

Jinhui Liquor’s stock price [SHA:603919] hit the 10 percent daily upper limit this morning after being suspended for two days. By noon, the shares were 5.91 percent up at CNY13.8 (USD1.93) while the Shanghai Stock Exchange Composite Index was 0.35 percent down.

Fosun International's Yuyuan Tourist Mart will purchase 152 million shares in Jinhui Liquor for CNY12.07 apiece, expecting to pay seller Gansu Yatter Investment Group CNY1.84 billion (USD256.7 million) to gain about 30 percent of outstanding shares, the retailer, which runs stores at tourist attraction Yuyuan Garden in Shanghai, wrote in a statement yesterday.

The Gansu province-based target company is one of China’s earliest spirits makers whose products are mostly available in western and northern China. Last year, Jinhui Liquor boosted its net profit by 4.6 percent to CNY271 million (USD37.8 million) from a year earlier. Listed in 2016, the firm's market value was CNY6.6 billion on May 25.

Fosun International has fulfilled its long-cherished wish to enter the field of spirits via Jinhui Liquor, said Zhu Danpeng, a Chinese food and beverage sector analyst. The new parent can help the distiller expand its business nationwide, boosting its mid and long-term outlook, Zhu added.

Fosun International has been increasingly betting on Chinese consumers' insatiable thirst. In 2017, the Shanghai-based firm purchased an 18 percent stake in Tsingtao Brewery for HKD6.6 billion (USD921 million) to become the second-largest shareholder of the major Chinese brewery.

Yuyuan Tourist Mart maintains its strategy to obtain excellent resources to serve China’s next-generation consumers while enriching its brands, the buyer's statement added. Through this addition, the company's number of 'China time-honored brands', a national marking for cultural specialties, rises to 17.

Editor: Emmi Laine