Shares of China Huiyuan Juice Group Ltd plunged in Hong Kong yesterday after the government blocked Coca-Cola Co's $2.4 billion bid for the juice maker.

Huiyuan's shares fell by HK$3.49 per share, or 42.05 percent, to close at HK$4.80 apiece. In early trading, the company's shares dropped 53 percent at one point to the day's lowest level of $3.88. The stock resumed trading yesterday after having been suspended since early Wednesday.

The latest price fall stood in sharp contrast to its performance in the past several months after the Coca-Cola bid was announced. Its share price had doubled since early September, after the US beverage giant offered HK$12.20 in cash for each of the juice maker's Hong Kong-listed shares.

The Ministry of Commerce on Wednesday vetoed Coca-Cola's bid to acquire Huiyuan, the country's largest juice maker, saying the acquisition could lead to the creation of too strong a player with sufficient resources and marketing prowess to squash its competitors.

During yesterday's regular briefing, Foreign Ministry spokesman Qin Gang said the ruling "is different from trade and investment protectionism".

"We will continue our policy of keeping the markets open and welcoming foreign investment," Qin said, reiterating that China opposes protectionism.

Analysts predicted that although Huiyuan, as an independent company, will do well in the long run, its share price will remain at around the current level in the short term.

OSK, a Hong Kong-based research firm, downgraded Huiyuan to "sell" with a target price of HK$4. "Without Coca-Cola's offer, we expect the price of Huiyuan to fall sharply," the firm said in a report.

Liu Ziyuan, an analyst with BOCOM International, estimated Huiyuan's share price will plunge to the level before the takeover plan was announced.

In the short term, Huiyuan has lost the chance of obtaining an injection of advanced management technique and marketing expertise from foreign investors, said Wang Xiaodi, an analyst from Merchant Securities.

But Liu said the failure of the Coca-Cola bid would not have a major impact on the ongoing business of Huiyuan. "The juice market has not changed since the takeover plan was announced last year," he said. "And there has not been a competitor that could threaten the place of Huiyuan in the domestic market yet."

Huiyuan is the largest juice beverage maker in China, with over 45 percent of the pure juice market in the country. It also controls more than a tenth of the Chinese fruit and vegetable juice market that grew 15 percent last year to $2 billion.

Liu said now it is more important to see whether the management team has a plan B now that the deal has failed.

Huiyuan was established in 1992 in Shandong province by Zhu Xinli, who now holds over 30 percent of its shares listed in Hong Kong.

After the takeover plan was revealed last year, Zhu said: "I would appreciate the government even if it is denied."

"If the deal is denied, I would assume the government has its own concerns," he was quoted as saying.

Huiyuan said on Wednesday it respects the MOC's decision, and business at the company would continue as normal.