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HK's Guorun to change name to Geely Automobile

HONG KONG, Jan 28 (Reuters) - Hong Kong-listed investment firm Guorun Holdings Ltd on Wednesday proposed to change its name to Geely Automobile Holdings Ltd, becoming the latest successful back door listing made by Chinese firms.

Guorun said the name change reflected its recent investment in the Chinese automobile industry by setting up a joint venture with Geely Group, China's sole private sedan maker, in Zhejiang province.

"The name signifies the group's major growing operation which is expected to be a major contribution to the group's overall profit in the near future," it said in a statement.

Geely Group Chairman and major owner, Li Shufu, recently bought a 20 percent stake in Guorun, which gave him the same level of control as Guorun Chairman He Xue Chu.

Buying into listed companies and changing their businesses by injecting assets is seen as a short-cut to a Hong Kong listing by mainland China based companies.

Geely could eventually inject all assets from its sedan-related business into their joint ventures with Guorun, Guorun Chairman He Xue Chu told Reuters in an interview earlier this month.

Shares of Guorun eased 1.14 percent to HK$0.87 on Wednesday after rising more than 120 percent in the past year.

In 2003, Guorun and Geely set up to two car joint ventures, Zhejiang Geely Guorun Auto Co Ltd in Ningbo and Shanghai Maple Guorun Auto Co Ltd in Shanghai to make economy sedans under the brands Maple, Merrie and Ulieu and sports car Beauty Leopard.

Guorun had no other major profitable businesses except the two joint ventures, He said.