HK Stock Market Move | SMC ELECTRIC (02381) saw a decline of over 12%, with a discount of approximately 65.63% in its general offer, and is expected to turn from a profit to a loss in the first half of the year.

SMC ELECTRIC (02381) fell over 12% at one point; as of the time of publication, it was down 7.81% at HKD 0.295, with a trading volume of HKD 9.5261 million. In terms of news, SMC ELECTRIC announced that the offeror, Xingzhao Holdings, will purchase 1.4 billion shares from its controlling shareholder, Xianqiao Electric, for a total price of HKD 154 million. Following the completion of this transaction, the offeror and concert parties will hold 70% of the total issued shares. The offeror is required to make a mandatory unconditional cash offer for all issued shares. The cash offer price is HKD 0.11 per share, which represents a discount of approximately 65.63% compared to the closing price on July 31. The company plans to declare a special dividend of approximately HKD 91.5 million, or HKD 0.04575 per share, before the completion. The offeror is held by Shenzhen Tianlong Mobile. In mid-last month, SMC ELECTRIC also issued a profit warning, expecting a loss attributable to shareholders of approximately HKD 2 million to HKD 5 million for the first half of this year, compared to a profit of about HKD 12.896 million for the same period last year. The board believes the shift from profit to loss is mainly due to a significant decline in gross profit. The substantial drop in gross profit is largely attributed to the adverse effects of the conflict between the United States and Iran, which led to a stall in the group's sales in the Middle East market and increased costs for several raw materials purchased by the group.