Hong Kong-listed China Vanguard Group Ltd has proposed that its existing and unissued shares of share capital denominated at HKD0.050 (US$ 0.0064) per unit should be subdivided by four, with each unit worth HKD0.0125.
The firm said the exercise would “result in downward adjustment to the trading price ”.
China Vanguard provides lottery-related services to the mainland China market.
In a filing on November 6 to Hong Kong’s Growth Enterprise Market, where the company conducts its share trading, it gave an explanation for the plan.
“The board believes that the share subdivision will decrease the trading spread and improve the liquidity in trading of the company’s subdivided shares and thereby would attract more investors and widen the shareholder base,” it stated.
The group’s shares were trading at HKD2.95 per unit at 2pm on Monday in Hong Kong, down 1.01 percent on Friday’s closing price.
It proposes calling an extraordinary general meeting – probably on December 16 – to allow stockholders to vote on the subdivision plan.
In September China Vanguard said it had moved back into the black in the fiscal year ended June 30 with a net profit of HKD14.9 million, compared to a HKD41.6 million loss a year earlier.
