(Yicai Global) July 3 -- Yunnan Metropolitan Real Estate Development's shares jumped by the maximum allowed in a single day after its ailing parent company said China Poly Group may become its new controlling shareholder.

Yunnan Metropolitan Real Estate Development [SHA:600239] rose almost 10 percent to end trading at CNY3.53 (51 US cents). The stock is still about a third down on a 52-week high of CNY5.18 in April.

 Central government-led Poly Group may invest in YMRED's parent company Yunnan Metropolitan Construction Investment Group, which is itself a unit of Yunnan's provincial government, and may even become its controlling shareholder, YMCI said in a statement today. It also said the two have not yet decided the size of the stake or even how they will cooperate, but YMCI's controller may change because of the collaboration.

YMCI, a real estate developer and infrastructure investor, has struggled with poor business performance in recent years. Xu Lei, who was chairman of the company for 14 years, surrendered to the authorities in May after being suspected of 'serious violation of laws and regulations.' Poly Group's possible takeover of YMCI offers a glimmer of hope.

Operating income at YMRED, its main subsidiary, fell 34 percent last year from 2017, with net profit of CNY821 million (USD119.2 million) after deducting non-recurring gains and losses. YMCI's revenue fell 63 percent in the first quarter of this year, and its net loss attributable to shareholders was CNY375 million.

The company's solvency has also been deteriorating. Its asset-liability ratio was 89.4 percent at the end of last year. The funding gap is large because about CNY12 billion (USD174 million) of debt will mature within a year, according to public data.