Hosa resumes after suspension

Business | Janice Huang 12 Jul 2018

Shares of Hosa International (2200) once surged 90 percent on Wednesday as it resumed trading after a short seller published a report accusing the company of faking accounting data.

The company suspended its shares at the end of last month after slumping 86 percent in a single day.

Hosa International said that to deal with the recent fluctuations of stock price, the firm is contacting the government of Fujian province, and the latter will provide support. Hosa International meanwhile is in talks with two state-owned enterprises over potential cooperation and share subscription.

Shares of the company opened higher at 50 HK cents yesterday morning, 90 percent higher than its final closing price of 29 HK cents before suspension on June 29. It closed at 36 HK cents, representing a 25.86 percent increase on Wednesday.

On June 29, Hosa International's shares slumped dramatically from the peak of HK$2.11 to 29 HK cents, 86 percent down from the day before.

It had been attacked by a short seller Bonitas Research, who claimed the company had fabricated its revenue in the past two years, and the intrinsic value of its shares was zero.

On July 10, Hosa International said in a stock exchange filing, that it had been informed by its controlling shareholder, Ho Born Investment Holdings, that chairman Shi Hongliu had entered into two deeds of gift on June 29 in relation to the transfer of 14,000 and 9,400 ordinary shares, being 14 percent and 9.4 percent of the shareholding of Ho Born to Shi Cuilian, the wife of one of his younger brothers, and Shi Hongyan, his other younger brother respectively.

Earlier in May, Hosa International made an agreement with Alibaba Sports Group on strategic cooperation throughout China in the integration of online and offline businesses, apparel, sports services and big data.

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