According to the Wisers Information APP, China Qinfa (00866) opened 14% higher in early trading and rose 14.10% to HKD 0.89 with a turnover of HKD 596,300 as of press time.

On the news front, China Qinfa issued an announcement that on June 25, 2024 (after the trading period), the seller Qinfa Investment Co., Ltd. (a wholly-owned subsidiary of the company), the buyer Zhejiang Energy International Limited, and the company (as the guarantor) entered into a sales and purchase agreement. Accordingly, the seller conditionally agreed to sell and the buyer conditionally agreed to purchase the sale shares, which accounted for 40% equity interest in the target company Liyuan Development Co., Ltd. upon completion, at a price of RMB 2.95 billion, which may be adjusted.

The announcement stated that the buyer's controlling company is a state-owned enterprise in China that owns a state-owned power plant in China and is seeking stable and reasonably priced coal sources for its power plants in China. Through the purchase of sales shares, the buyer will be able to invest in overseas coal mines with sufficient coal reserves.

The seller is seeking to monetize part of its investment in SDE (PT Sumber Daya Energi), in exchange for cash. The consideration received by the seller will mitigate its financial pressure on capital expenditures and loan repayments. After entering into a coal supply agreement, the seller will have a stable source of income since the buyer's state-owned power plants have continuous demand for coal.