(Yicai Global) Oct. 31 -- Aluminum product manufacturer China Hongqiao Group Ltd. [HK:1378] resumed trading of its stock yesterday, seven months after it halted trading following Emerson Analytics Co.'s issuance of a downbeat report.
China Hongqiao's share price was up by more than 40 percent at one point yesterday. It closed at USD1.19 (HKD9.3), up 31.92 percent.
Emerson issued another negative report yesterday, affirming that its previous assessment of the firm was accurate.
Emerson put out its first short-selling report on China Hongqiao on March 1, pointing out issues with the group, such as soaring profits, low power generation costs and excessive debt, and questioning its development model of excessively fast expansion.
China Hongqiao then suspended its share trading for a prolonged period and issued a detailed clarification report on Oct. 25, saying that the Emerson report was very misleading and ill-founded. China Hongqiao suggested that Emerson likely collaborated with certain institutions or individuals, as well as Hongqiao's competitors in the aluminum industry, to maliciously attack Hongqiao.
Emerson issued another negative report in response, saying that China Hongqiao's clarification is flawed, which further convinced Emerson that its accusations that China Hongqiao had issues with excessively low costs, excessive debt and financial fraud were accurate. Emerson called on the Securities and Futures Commission of Hong Kong to pay attention to the financial issues of Weiqiao Textile Company Ltd. [HK:2698], which is affiliated with China Hongqiao.