HK Stock Market Move | Guangzhou Automobile Group (02238) rose nearly 3% recently and plans to sell 50% equity of Guangqi Finance Leasing. It is expected to be completed in January next year.

Guangzhou Automobile Group (02238) rose nearly 3%, as of the time of writing, it rose 2.68% to HK$3.45 with a turnover of HK$19.4976 million. On the news front, recently, Guangzhou Automobile Group released the latest progress announcement, involving the sale of 50% equity of its subsidiary Guangzhou Finance Lease Co., Ltd. The prerequisite conditions for this equity sale have been met, and it is expected that the subsequent business change registration procedures will be completed by January 2025. According to the capital increase agreement, the subscriber is required to pay 80% of the total amount within one month from the completion date, which is RMB 1.706 billion, and the remaining 20% (RMB 426 million) is to be paid within one year after paying 80% of the total amount. The announcement states that the valuation of Guangzhou Finance Lease Co., Ltd. is RMB 2.13 billion, with valuation methods including the asset-based method and market method. Ultimately, the valuer used the market method for valuation, believing that the price-to-book ratio (P/B) of Guangzhou Finance Lease Co., Ltd. is 1.5719 times. Based on this P/B ratio, the total equity of Guangzhou Finance Lease Co., Ltd. is RMB 2.13 billion. The Board of Directors acknowledges the valuation results and believes that the valuation method and assumptions are fair and reasonable.