The share prices of Hong Kong-listed clothing firm Bossini International Holdings just got a big boost after news broke out that Chinese sportswear giant Li Ning has expressed interest in buying a majority stake in the company. Bossini's shares nearly doubled on Thursday as investors stocked up on its shares on the hopes of a possible turnaround under the new majority shareholder.

Bossini's shares in Hong Kong had surged by more than 99 percent on Thursday, closing at HK$0.5 per share. The surge continued the stock's five-day growth streak, which had seen a cumulative increase of over 233 percent. The renewed interest in the stock comes as news broke out of a possible majority stake acquisition by a joint venture company owned by Viva China; a sports talent agency founded the former Chinese Olympic gymnast and owner of Li Ning Company Limited.  

According to reports citing sources close to the matter, the joint venture company has expressed interest in buying a 66.6 percent stake in Bossini. The controlling stake acquisition heightened the optimism of investors about the future prospects of the clothing company, which was founded by the local textile tycoon, Law Ting-pong, in 1987. Most believe that the new controlling shareholder has the resources to transform the company and propel it to new heights in terms of profitability.

Analysts at Everbright Sun Hung Kai stated that the perception of Bossini has now been fully transformed and its long-term prospects are much brighter under the new investors, particularly in the mainland Chinese market. Most investors have also remained unfazed by the fact that Bossini's shares will be purchased at a massive 71 percent discount.

Bossini currently has 180 stores in mainland China and another 39 stores in Hong Kong. The company's operations and financial performance have deteriorated over the past couple of years as it had failed to evolve and adapt to changing consumer taste and demand. The months of civil unrest, the economic downturn, and the spread of the coronavirus pandemic had all worsened its already dire situation, heavily weighing on its revenues and profits. Last year, the company reported a HK$139 million loss in its business due to the unprecedented series of economic factors.

At its peak, Bossini was regarded as one of Hong Kong's three most iconic local clothing brands, along with Baleno and Giordano. In 2004, the company hit a market capitalization of more than HK$812 million. Its valuation has since plunged by more than 81 percent.