China Wonder is selling its capital equipment manufacturing business Creative Legend to Friend Birch for RMB30m (£2.78m) and it will look for acquisition opportunities.
The business being sold generated a pre-tax profit of £340,000 on revenues of £2.48m in 2009. The whole group made a profit of £637,000 on revenues of £4.53m. China Wonder says that it does not have the cash to provide the business with the cash it needs. Net debt was £243,000 at the end of June 2010. There was also a £250,000 available for sale financial asset in the balance sheet.
Friend Birch is a subsidiary of Nasdaq-listed Wonder Auto Technology, where the chief executive of China Wonder is also a director. WAT’s chief executive Qingjie Zhao owns 10.4% of China Wonder.
China Wonder still owns its original packaging machinery business.
At 25.5p a share, China Wonder is valued at £4.59m.
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