China Construction Materials (03323.HK) rose 3.1% this morning, with the latest report of 3.61 yuan up 3.1%. China Construction Materials (03323.HK) announced a conditional cash offer earlier today to repurchase up to 0.8417 billion shares of H shares representing 9.98% of total share capital at a price of $4.03 per share, 15.14% over the previous trading day price, according to a research report. At present, the parent company of China Construction Materials and its consistent operator jointly hold 45.02% of the shares in China Construction Materials, i.e.Share RepurchaseSubject to full acceptance and cancellation of all repurchased shares, the shareholding ratio of its parent company and its consistent operators will be increased to 50.01%.

The Bank believes that the repurchase will provide its existing H shareholders with an opportunity to exit at a high price or increase their actual shareholding, while the parent company and consistent shareholder will also increase control over Chinese construction materials. Expecting a strong quarterly improvement in the profitability of China Building Materials starting in the fourth quarter, it had earlier upgraded its rating from “hold” to “buy”, giving it a target price of $3.87. Looking for the repurchase to be approved, the Bank expects China Construction Materials may have room for further upside.