GUANGZHOU Pharmaceutical Co surged by the daily limit of 10 percent when it
opened for trading yesterday after disclosing that its parent group will gain
exclusive use of the Wong Lo Kat herbal tea trademark following a trade
arbitration at the weekend.
In a filing to the Shanghai Stock Exchange over the weekend, the company said Guangzhou Pharmaceutical Group received a ruling last Friday by the China International Economic and Trade Arbitration Commission stating that the JDB Group will stop using the trademark.
Two supplementary trademark leasing agreements signed by the two parties were declared invalid, the filing said.
Guangzhou Pharmaceutical opened 10 percent higher at 20.91 yuan (US$3.31). The stock has risen 41.7 percent since May 7.
"Regaining the trademark will give Guangzhou Pharmaceutical a boost in sales and push up its earnings significantly," said Zhou Jing, an analyst at Guolian Securities.
This will help Guangzhou Pharmaceutical to diversify its herbal tea products, Zhou said.