SHARES of China Huarong Asset Management Co. plunged as much as 55 percent in Hong Kong yesterday to a record low, after trading resumed following a nine-month hiatus, even as the bad loan company said its restructuring had paved the way for healthy growth.

Huarong, which counts China’s finance ministry as its largest shareholder, suffered huge losses and its former chairman was convicted of bribery, leading to a State-backed bailout last year.

Huarong shares traded as low as HK$0.46 (US$0.0590) yesterday, more than halving the firm’s value during its previous trading session March 31, 2021.

The price is also the lowest since Huarong’s listing in 2015, and represents a nearly 50 percent discount to the company’s net asset value, reflecting investor pessimism.

In an apparent effort to inject some optimism, Huarong’s management said yesterday that recent capital injections by strategic investors would breathe new life into the company. Huarong’s share tumble handed its strategic investors, which had bought a total of 41.2 billion domestic and Hong Kong shares for 1.02 yuan apiece, a combined loss on paper of 26.4 billion yuan (US$4.1 billion).

Citic Group, now Huarong’s second-largest shareholder after the Ministry of Finance following the recapitalization, saw its investment slide about 12 billion yuan. China Insurance Rongxin Fund, the third-biggest holder, was hurt to the tune of 9.3 billion yuan. Nevertheless, representatives from both firms said at a press briefing yesterday that they were optimistic about Huarong’s prospects.

“The investment will further strengthen Citic’s positions in the bad asset management sphere and help the group better serve national strategy,” said Wei Xu, deputy general manager of the Strategic Development Department at Citic Group. “We’re optimistic about the opportunities from distressed markets as well as the future of Huarong.”

Rongxin general manager Luo Yihong said its investment was made from a longer term perspective and is “an example of insurance capital being put to use to maintain financial market stability.”

Strategic investors have replenished capital and “laid the ground for sustainable and healthy growth,” vice president Wang Wenjie said in a speech that was posted on Huarong’s website. (SD-Agencies)