Sinotruk Shares Soar On Trade Resumption After MAN Stake Buy

Sinotruk (Hong Kong) Ltd. (3808.HK) surged as much as 28% Thursday after German truck maker and engineering company MAN SE (MAN.XE) agreed to acquire a major stake in the company.

Analysts said the EUR560 million deal will give the Chinese truckmaker access to MAN's advanced engine technology and help its plan to become a major truck exporter.

At 0350 GMT, Sinotruk's shares were up 17.4% at HK$8.82, off a high of HK$9.60 at the start of the session. The stock had been suspended from trading since June 29, pending the announcement of the MAN acquisition.

The benchmark Hang Seng Index was up 1.8% at 18,584.

Sinotruk said Wednesday MAN plans to invest EUR560 million in the company by subscribing to convertible bonds and purchasing existing shares from Sinotruk's parent company, China National Heavy Duty Truck Group.

On full conversion of the convertible bonds, MAN will become the company's second-biggest shareholder with a 25%-plus-one-share stake, with Sinotruk's parent holding 51%.

"We view this tie-up as a long term positive for Sinotruk, which would make it one of very few Chinese truck makers with access to the global truck platform and ability to differentiate itself from other local peers," Morgan Stanley said in a note Thursday.

Francis Lun, general manager at Fulbright Securities, said the deal will support Sinotruk's shares and other companies in the sector.

"MAN's purchase of shares is supporting a positive view on the industry," Lun said.

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