Forget white knights. Now China is introducing fairy godmothers. With one wave of Citic Group’s wand, the mainland state-owned conglomerate is turning its ailing mining, property and telecoms offshoot, Citic Pacific, into a big, heavily financial group by injecting $37bn of assets. Granted, fairy godmothers do not normally shrink free floats to fund deals, but like Citic Group, they can show amazing timing.

Since the deal was first outlined last month, Citic Pacific shares have jumped 13 per cent. The news came just days after China-related shares had bottomed and investors were minded to seek bargains – and, at 0.6 times book value, Citic Pacific could be considered one. Then last week came news of the so-called “through train” reforms that will allow Hong Kong and Shanghai investors access to each other’s markets. Brokers – such as those included in this deal – jumped. Under the terms of the deal, Citic Pacific will buy $36.7bn in assets with $8.1bn in cash and $28.6bn in new shares. The cash will be raised via more new shares at the same price to other investors. Those outsiders will end up with between 15 and 25 per cent of the new company compared with 40 per cent of Citic Pacific’s current group of assets and at the issue price of $13.48. New and improved Citic Pacific would then be worth 0.9 times book value. Cynics will shrug since it was not as if having a 40 per cent stake gave minorities much say before when the rest was owned by a state-owned enterprise.

New Citic is positioning itself as a one-stop China play, with exposure in revenue similar to widely used Chinese indices. That is a stretch. For example, the investors would get exposure to a football team (yes) but not to an internet play; something in most key indices. Fairy godmothers can turn pumpkins into golden coaches. It is premature to say if this is one, or just a bigger pumpkin.