(Yicai) Dec. 11 -- Shares of Li Ning tumbled after the Chinese manufacturer of sportswear said it intends to buy a building for HKD2.2 billion (USD282 million) to establish its regional headquarters in the Hong Kong Special Administrative Region.

Li Ning's Hong Kong-traded equity [HKG: 2331] closed 14.3 percent lower at HKD18.30 (USD2.30) after tanking by 16.3 percent intraday. The shares are down by almost three-quarters since the beginning of this year.

The seller of brands Danskin and Double Happiness will purchase a 24-story building with two floors of retail space from Henderson Land Group, the Beijing-based buyer announced yesterday.

The move shows that Li Ning is fully confident about its Hong Kong business prospects and plans to strengthen international growth, the company said, adding that the international business hub should help Li Ning link up with other countries to explore global business opportunities.

Securities Times reported today that the market is not optimistic about Li Ning’s investment decision, most likely because of the SAR's real estate downturn. As of Dec. 4, a housing price index compiled by Hong Kong-based property brokerage Midland Holdings completed its 16th straight week of declining to 140.78 points, falling by 1.13 percent from a week earlier. This year, the index has dropped by 3.6 percent, per the report.

Li Ning failed to meet market expectations in the third quarter as sales grew by a mid-single-digit rate from a year ago, as the firm revealed on Oct. 25. The next day, Li Ning's shares dropped by nearly 21 percent.

In the first half, Li Ning performed worse than its major rival Anta Sports Products. Li Ning's revenue rose by 13 percent to CNY14 billion (USD1.9 billion) from a year earlier while net profit narrowed by 3 percent to CNY2.1 billion (USD292.4 million).

Editor: Emmi Laine