(Yicai) July 8 -- Shares of Gree Real Estate surged by the exchange-imposed upper limit after the nearly 20-year-old property developer announced a change of means to buy a controlling stake in Zhuhai Duty Free Enterprise Group, a major tax-free retailer.

Gree Real Estate [SHA: 600185] jumped 10 percent to close at CNY4.96 (US 70 cents).

The conglomerate will sell property development businesses in various cities such as Shanghai, Chongqing, and Sanya to buy at least 51 percent of the state-owned retailer of duty-free goods, the Zhuhai-based firm announced yesterday, changing its earlier plan of issuing shares. The funding gap will be covered by paying in cash, the firm added.

The original plan, revealed last April, involved the company buying shares in one of the nation's few licensed sellers of duty-free luxury goods from a municipal manager of state-owned assets and Zhuhai Urban Construction Group by issuing new equity to up to 35 pre-selected investors.

The update is based on the company's strategic plans to gradually exit property development for a business transition, the firm said yesterday. Gree Real Estate's core businesses are property, consumption, and healthcare. Operations are currently normal and the revision will not cause major adverse impacts on its existing production, operations, or strategic development, it added.

In the first quarter, Gree Real Estate recorded a loss of CNY103 million (USD14.2 million), versus a profit of CNY10 million (USD1.4 million) a year earlier, according to its earnings report. Revenue jumped 49 percent to CNY1.5 billion (USD206.3 million), mainly due to carryover income from the property segment while the slump in profitability was mostly caused by a falling gross margin.

Editor: Emmi Laine