(Yicai Global) July 21 -- Anhui Gujing Distillery’s stock price surged by the exchange-imposed limit after the Chinese baijiu maker announced the completion of a CNY5 billion (USD772 million) private placement of shares to 13 investors headed by E Fund Management.

In the morning trading session, Gujing [SHE:000596] rose as much as 10 percent before ending today 8.2 percent higher at CNY245.5 (USD37.90), giving it a market capitalization of CNY123.6 billion (USD19 billion).

E Fund Management invested CNY2.55 billion for more than half of the 25 million shares Gujing sold at CNY200 (USD31) apiece, the Anhui province-based distiller said in a statement yesterday. One of China’s leading mutual fund managers, E Fund is now Gujing’s fifth-largest shareholder after increasing its stake to 1.7 percent from 1.58 percent.

Other investors included ICBC Credit Suisse Asset Management and China Fund Management, which injected CNY430 million (USD66.4 million) and CNY400 million, respectively. A Baijiu Index-tracking fund under the latter now owns almost 2 percent of the shares of Gujing, becoming its third-largest shareholder.

Proceeds from the private placement will go on smart distillery technology, according to the plan Gujing released last November. This will significantly improve the quality of its base liquor as well the plant’s automation and informatization, the firm said. The cost of raw materials and labor will also be cut.

Founded in 1992, Gujing Distillery is famous for its traditional Chinese spirit Gujinggong Jiu, which means ‘ancient well tribute liquor.’ The firm’s net profit dropped 11.6 percent to CNY1.9 billion (USD293 million) last year amid the coronavirus pandemic. Revenue fell 1.2 percent to CNY10.3 billion (USD1.6 billion).

Editor: Futura Costaglione