Follow Variables in HK BLDG & LOAN! (OrientaL Daily)

April 7, 2011

A number of trades worthy of 90m shares were discovered yesterday on the rarely concerned HK BLDG & LOAN (00145) which is nicknamed “Haunted House” by retail investors. The deals obviously by large investors amount to 667m shares, accounting for 66 times more than the 10m on Monday

The Group announced acquisition of Weldtech, a China mainland energy monitoring and energy efficiency solution provider at a price of 2.8 billion. Weldtech is engaged in EMC service for chiller units, or to be brief, providing energy efficiency solutions for chiller units of retail properties and public buildings and sharing profits from the energy savings. The EMC scale nationwide over the next decade is quite promising and estimated to reach RMB 370 billion.

This M&A is paid by 231 million in cash, and the rest in convertible notes and consideration shares. Both conversion price and issue price are 0.16 per share. The current price of HK BLDG & LOAN is only 850 million. By interest of this overambitious M&A, Weldtech is ready for backdoor listing and believed to have prospective capital need and speculation space. The price closed at 0.213 yesterday. Investors may follow at the high price of 0.26 and stop loss at 0.2.