PEAK Privatization Plan May Be Blocked, Sports Shares Plunge

China listed in Hong Kong Sports brand Peak Sports (01968.HK) shares plunged today, dropping 10% during the session, slipping to 2.05 yuan to break the 20 day line, the biggest decline since last August 24th.

Investors worry that the privatization plan of the company may be blocked, which is the key reason for PEAK's tumbling today. Analyst Terry Hong said in a Bloomberg interview that the popularity of the company may be frustrated because the company has not yet provided further information on privatization.

But PEAK CEO Xu Zhihua said in response to Bloomberg's privatization plan by telephone, everything is proceeding according to plan. But PEAK has not yet responded publicly to whether there is a plan to return to A shares.

In May 23rd this year, PEAK sports announced a suspension of share trading. In conjunction with the announcement of the company's "change of chief financial officers, company secretaries, authorized representatives and agents in Hongkong receiving legal procedures and notices" issued on the same day, the industry speculated that PEAK would privatize and remove the cards from the stock exchange, and consider returning to A shares.

PEAK had already begun to build industrial groups long ago, and it was only a matter of time before they returned to A shares. Once it is determined that it will return to A shares, it will start the first shot of the Hong Kong stock movement's brand return.

　　 market According to people's analysis, PEAK chose to return to A shares, on the one hand, because the share price of Hong Kong stock is too low, there is hardly much room for financing. On the other hand, the upgrading and explosion of China's sports industry has created greater imagination for the domestic sports brand.

PEAK sports was founded in 1989 and landed on the main board of Hongkong stock exchange in 2009. With a series of cooperation with NBA, market participants believe that PEAK sports after listing in Hongkong has limited financing effect and low valuation. At present, the total market value of PEAK sports is about HK $4 billion 590 million (about 3 billion 860 million yuan). According to the approximate PE value, PEAK sports that return to A share market may reach nearly 20 billion yuan.

China's stock return to A shares is one of the popular concepts at the moment. In the past two years, about more than 30 listed companies in China, including 360, Dangdang, Shengyuan and ai Kang, have already completed or are planning to privatize and seek to return.

In May 25th, PEAK stock resumed. The market response was enthusiastic, with a sharp opening of 17.7%, and it rose nearly 20% in intraday trading. In June 29th, PEAK's share price rose to 2.33 yuan this year.

However, there has been no further news in the past month, and the market is worried that PEAK's privatization plan can not advance smoothly.

Analysts pointed out that the privatization of Hong Kong stock listed companies delisting is more complicated in terms of capital than the privatization of the same US listed companies. At the same time, the recent sharp price gap and the speculation of shell resources in the domestic and foreign markets have aroused high attention from regulators. New obstacles have been added to enterprises that plan to split the VIE structure overseas and to share A shares through the backdoor market.

At the close of 16, PEAK's stock price was 2.14 yuan, down 6.14% from the previous trading day.