(Yicai Global) May 13 -- Shares in Hybio Pharmaceutical rose by the maximum 10 percent daily limit today after the firm announced plans to invest CNY500 million (USD72.9 million) over five years to build an industrial hemp planting base in southwest China's Yunnan province.
The stocks [SHE:300199] rose 10.05 percent to CNY11.28 (USD1.65) this morning. The Shenzhen-based firm will set up a joint unit with Dali National Economic and Technical Development Zone to gradually form an industry chain covering industrial extraction of active hemp ingredients, bulk pharmaceutical chemicals, drug research and development over five years, according to a statement on Friday.
Hemp has become an investment hotspot in the Chinese stock market since the beginning of this year. Stocks of many listed companies surged after they announced entry into the hemp cultivation and processing sector. But China has not approved the cultivation of hemp for medical use, nor the selling of drugs containing active cannabinoids such as tetrahydrocannabinol.
The development zone will assist the company in securing required qualifications for businesses including planting and processing and provide around 3.3 hectares of land via leasing, transfers and other legal means to construct the base.
The area's committee will also assist Hybio to pick up land within the Dali Bai Autonomous Prefecture for the base, which is expected to cover 333.3 hectares in the long-run. Alleviating poverty and increasing farmers' income as well safeguarding raw material supply will be priorities when selecting land.
Yunnan province, home to suitable natural and climatic conditions for growing hemp, is one of three provinces nationally where the industrial hemp sector is legal.
Editor: William Clegg