(Yicai) Dec. 21 -- Shares of Chengdu Hongqi Chain rose after the Chinese convenience store chain said Sichuan Commercial Investment Group, a capital investment company backed by the government of China's southwestern Sichuan province, is set to take control of the company.

Hongqi Chain [SHE: 002697] closed 3.5 percent up at CNY5.56 (78 US cents) in Shenzhen today, after opening up by the 10 percent exchange-imposed daily trading limit.

Sichuan Commercial Investment will receive a 6.9 stake in Hongqi Chain from its actual controller Cao Shiru and the person acting in her concern and a 10 percent stake from its second-largest shareholder Yonghui Superstores, the Chengdu-based company announced yesterday.

Moreover, Cao will relinquish the voting rights from her remaining stake in Hongqi Chain, which totals 20.7 percent, the firm added.

Sichuan Commercial Investment, Cao, and the person acting in her concert also signed a performance pledge agreement yesterday. According to the deal, Hongqi Chain's net profits shall be no less than CNY230 million (USD32.2 million) per year between next year and 2026. In addition, Cao and her person acting in concert should transfer another 5.2 percent stake in Hongqi Chain to Sichuan Commercial Investment.

Yonghui said in a statement yesterday that it will still own 11 percent of Hongqi Chain's total equities after the transfer.

Founded in 2000, Hongqi Chain focuses on serving residential communities. It runs over 3,600 self-operated stores. In the first three quarters of the year, it reported net profit of CNY407 million and revenue of CNY7.6 billion (USD1.1 billion), up 14 percent and 0.9 percent, respectively, from a year earlier.

Editor: Futura Costaglione