KFM Kingdom (03816) surged more than 12% in afternoon trading, reaching a record high. As of press time, the stock was up 12.45% at HK$5.78, with a turnover of HK$23.819 million.
On the news front, Luxshare Precision Industry Co.,Ltd. (002475) recently announced plans to acquire a 57% stake in KFM Kingdom for approximately HK$684 million, while also subscribing to approximately HK$252 million in zero-coupon convertible bonds issued by KFM. KFM Kingdom Holdings has appointed Quam Capital as its independent financial adviser to provide advice on the transactions related to the Luxshare subscription agreement and the offer.
According to Citigroup analysis, KFM Kingdom's consolidated contribution to Luxshare Precision Industry Co.,Ltd.'s revenue and profit is less than 0.5%. However, the focus of this deal lies in precision metal structural components and stamping process capabilities.
Beyond the process complement, Luxshare Precision Industry Co.,Ltd. places greater value on the target company's established manufacturing bases in Suzhou and Malaysia.