(Yicai Global) June 29 -- Jihong Group’s shares ended a four-day winning streak today after the Chinese internet marketing firm’s plan to acquire a distillery at a high premium sparked an inquiry from the Shenzhen Stock Exchange.

At the close of trading, Jihong [SHE: 002803] was down just over 1 percent at CNY30.83 (USD4.77), after falling as much as 1.8 percent. The broader Shenzhen Component Index also fell 1 percent.

The Xiamen-based company plans to buy at least a 70 percent stake in Diaotaigong Liquor Industry, Jihong said in a statement late yesterday. It did not disclose the price or how it will raise the funds. The Shenzhen exchange subsequently sent a letter of inquiry to Jihong on the same day.

Before Jihong’s announcement, its stock price had gained more than 30 percent over four straight trading days from June 23.

Diaotaigong acquired all of Gujiao Liquor Industry in Maotai town, Guizhou province, for CNY175 million (USD27.1 million) in January, Jihong said. Maotai is the same location as China’s famous liquor brand Moutai.

According to information disclosed by the bourse, Gujiao Liquor had only CNY1.5 million (USD232,000) in net assets at the end of last year. It had CNY1.4 million in sales, and a net loss of CNY1.8 million. Diaotaigong shelled out 114 times Gujiao Liquor’s net assets to acquire it.

The bourse asked Jihong to explain why it plans to buy the stake at a high premium and the need for it. It also asked the company to specify the funding sources for the acquisition.

Editor: Peter Thomas