SHANGHAI, Jun. 24 (SMM) – Shenghe Resources Holding Co. signed an agreement on June 18 that suspended its move to invest overseas, it told Shanghai Stock Market June 20.
Shenghe Resources' subsidiary Shenghe Leshan Rare Earth Technology Co. entered into a purchase agreement with Peaceful Art International Limited (PAI) on February 24 this year, to acquire 40% stake in Integral Materials Investment Limited held by PAI with 236.80 million yuan ($ 38.41 million).
However, as Integral Materials' wholly-owned subsidiary Integral Materials Investment Vietnam Co., mainly responsible for production and processing, is located in Vietnam, Shenghe Resources decided to cancel the purchase agreement considering investment risk arising from the Sino-Vietnamese dispute over territory.
Prerequisites set out in the purchase agreement to bring the agreement into effect are not fully achieved, Shenghe Resources said.
Shenghe Resources realized 1.37 billion yuan in operating revenue in the 2013 fiscal year, up 83.36% from a year ago. However, its net profit posted a 4.33% decline to 147.85 million yuan, due partly to falling rare earth prices and China’s economic slowdown, it said in its annual report filed to Shanghai Stock Exchange earlier.