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Uni-President stock rallies despite earnings dive and cash call

Stock gains 4pc even after noodle maker reports 38.2pc profit fall and taps market for HK$447m

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Uni-President disclosed a gross margin of 32.5 per cent for the first half, a drop of 1.5 percentage points, largely attributable to its money-losing noodle business.

What happens when a company announces a fundraising on the back of a big drop in profit?

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In the case of noodle and beverage producer Uni-President China Holdings - a rising share price.

The company on Friday posted first-half results in which it disclosed a drop in gross margin and profit, and a stunning 38.2 per cent dive in attributable profit to 355.4 million yuan (HK$447.4 million). Sales increased a slender 1.3 per cent.

On Sunday, the firm announced plans for a 1 billion yuan bond for listing on Taiwan's GreTai market.

It was a lot of information for investors to process but in the event, the impact was positive.

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The company's share price yesterday rose 4.09 per cent to HK$6.61.

Analysts said the earnings results were in line with expectations and that Uni-President's core profitability was intact.

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