(Yicai Global) Aug. 18 -- Shares of Chinese refrigerator maker Homa Group jumped after TCL Technology's home appliance unit offered CNY1.5 billion (USD230 million) to increase its shareholding to nearly 50 percent.

Homa's stock price [SHE:002668] surged by the daily limit of 10 percent to CNY5.72 (88 US dollar cents) today.

TCL Home Appliances Group would buy almost 23 percent of shares outstanding in Homa, or CNY6 apiece, the Huizhou-based buyer said in a statement yesterday.

The deal would consolidate TCL's control over the listed company, as well as enhance its shareholding structure, the firm added.

A Good Target 

Zhongshan-based Homa is a strong exporter despite its poor stock market performance since 2018 due to a debt crisis linked to its financial platform. The company's shares haven't exceeded CNY10 since 2018. In 2015, they reached an all-time high of CNY26.84.

The fridge maker has had a great year so far. Homa logged a 43 percent increase in net profit to CNY78.1 million (USD12.1 million) in the first half of this year from a year ago, according to its earnings report. Its revenue climbed almost 34 percent to CNY4.8 billion.

TCL Home Appliances has been buying more shares in Homa through this year. On May 10, the firm said it has become the controlling shareholder of Homa with its nearly 24.9 percent stake. Thus, TCL had the right to appoint four of the nine directors on Homa's new board.

Big Plans

Acquiring Homa is a shortcut for TCL to achieve more in the refrigerator market, the Beijing News reported today, citing Liang Zhenpeng, an analyst in the home appliance sector. 

TCL Home Appliances' market share is small in air conditioners, fridges, and washing machines, while Homa is performing well as an exporter despite its relatively small market share in China, Liang added.

TCL might be planning to buy even more shares in Homa and move all of its white goods business under the firm, Liang added. 

The buyer will not exclude the possibility of further increasing its shareholding in the listed company in the next 12 months, Homa said in a statement yesterday.

TCL Home Appliances narrowed its net profit by 35 percent to CNY259 million in 2020 from 2019. But its revenue climbed by 3 percent to CNY15.6 billion (USD2.4 billion).

Editor: Emmi Laine, Xiao Yi