(Yicai Global) June 9 -- Haoxiangni Health Food Co.  [SHE:002582] plans to repurchase up to 43.83 percent of its shares with its own funds to cut its registered capital, it said in a statement yesterday that shot its shares to the daily 10 percent price ceiling at opening to halt trading at CNY11.51 (USD1.62).

It will take back at least 113 million shares and up to 226 million through centralized bidding, making up at least 21.91 percent but no more than 43.83 percent of the current total, the firm based in Zhengzhou in central China's Henan province said in the statement. The price for each will be as much as CNY13 (USD1.80), an about 24 percent premium from the CNY10.46 at which its stock closed yesterday.

Repurchasing 113 million shares and 226 million shares will respectively cost the firm CNY1.47 billion (USD207.7 million) and CNY2.94 billion based on the CNY13 price ceiling.

Haoxiangni's total market capitalization is only CNY5.37 billion, of which the market cap of stocks in circulation made up CNY3.9 billion as of yesterday's market closing. The stock buyback will recover up to 75 percent of the market value of these stocks if the firm gets 226 million shares at CNY13 apiece.

The firm has plenty of cash in hand as it has received about CNY4.97 billion (USD705 million) from PepsiCo Beverages Hong Kong, it said.

The company sold its most critical asset, the 100 percent equity it holds in snack food brand Be&Cherry's owner Hangzhou Haomusi Foodstuff to PepsiCo for cash, at a price of USD705 million, Haoxiangni announced on Feb. 23. Chinese regulators approved the transaction and it has closed, PepsiCo said on June 1.

Haoxiangni realized CNY1.77 billion in operating revenue in this year's first quarter even with the sale of its core assets. This figure marked a 7.71 percent drop on the year, with net profit attributable to the parent slumping over 78 percent to CNY29 million.

Haoxiangni's executives and shareholders plan to cash in their shares, according to another statement the firm released yesterday. Qiu Haoqun, a director and vice general manager, will sell 35,500 shares, while its second-largest shareholder Hangzhou Haohong Industry will sell 15.47 million, as many as 3 percent of the total.

Editor: Ben Armour