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Samuel Yeung

Shares in medical services firm Quality Healthcare Asia surged 10.5 per cent yesterday on news that a major chunk of the company was changing hands.

Quality Healthcare jumped 1.9 HK cents to close at 20 HK cents following the announcement that chairman Brian O'Connor planned to sell his 28.53 per cent stake to a firm wholly owned by brokerage Sun Hung Kai & Co.

The stake -  617.19 million shares altogether controlled by Mr O'Connor and a family trust -  will be sold at 23 HK cents per share.

Upon completion of the sale, Mr O'Connor will remain as non-executive chairman and a director of the company.

The main board-listed operator of clinics and homes for the elderly recorded a 44.5 per cent year-on-year fall in net profit to HK$7.89 million in the six months to June 30.

Factoring out a one-off gain of HK$84 million in the previous corresponding period, the company's core medical services business in the first half posted a 69.3 per cent year-on-year growth in operating profit.

After the stake transfer, which will cost Sun Hung Kai HK$141.95 million, the brokerage will become Quality Healthcare's largest shareholder.  The second-largest shareholder will be CLSA Capital, which owns 15.84 per cent of the company.

Sun Hung Kai said the purchase was in line with its strategy of diversifying its business into other areas.

'[The company] has identified healthcare as a sector which might have potential for growth in the expected future economic circumstances,' the brokerage said.

Due to the adverse market conditions, the brokerage, which also makes loans and trades other financial products, saw its first-half net profit shrink 32 per cent year on year to HK$103.6 million.

It is believed Sun Hung Kai will fund the acquisition with internal resources.

The brokerage's chief operating officer David Parker said last week that the firm held about HK$300 million cash in hand.

It recently proposed using part of the cash to buy back up to 21.65 per cent of its shares, which fell one HK cent yesterday to close at HK$1.03.



Quality Healthcare shares get 10pc boost as chairman plans stake sale