Rise in Xinren Aluminum‘s share price fueled by the acquisition of two smelting plants.

Xinren announced this morning that it has entered into two conditional sales and purchase agreements with the Zeng family, shareholders of Liupanshui and Yichang smelting plants. The cost of these acquisitions is expected to be S$38.5m and S$46.7m respectively.

This follows an earlier announcement on 11 Mar of the company’s intention to acquire direct ownership over these two smelting plants.

The share price rose by 7% yesterday and has risen another c. 4% today. This has narrowed the stock’s discount and reflects the company’s impending assumption of direct ownership over these two plants. We already upgraded our TP to S$0.76 on 14 March to reflect this acquisition.