THE INSIDER
The Insider
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Buybacks take spotlight with several firms recording rare repurchases

18 companies post 86 repurchases worth HK$148 million

PUBLISHED : Sunday, 08 May, 2016, 1:34pm
UPDATED : Sunday, 08 May, 2016, 1:34pm

The buying remained high while the selling among directors plunged based on exchange filings during the holiday-shortened week of May 3 to 6. A total of 29 companies recorded 158 purchases worth HK$238 million versus nine firms with 25 disposals worth HK$107 million.

The number of companies and trades on the buying side were consistent with the previous week’s five-day totals of 32 firms and 187 purchases while the buy value was up from the previous week’s acquisitions worth HK$196 million. On the selling side, the number of companies and trades were sharply down from the previous week’s 16 firms and 99 disposals. The sell value, however, was not far off the previous week’s sales worth HK$110 million.

Meanwhile, buyback activity rose last week, with 18 companies posting 86 repurchases worth HK$148 million. The figures were not far off the previous week’s five-day totals of 18 firms, 85 trades and HK$145 million.

Buybacks took the spotlight last week with several firms recording rare repurchases. China Aoyuan Property and Harmonicare Medical bought back for the first time since listing following sharp rebounds in their share prices. On the flip side, there were rare buybacks in China New City Commercial, SMI and Tianneng Power following sharp falls in their share prices.

Property developer China Aoyuan Property recorded its first buybacks since listing in October 2007 with 9.3 million shares purchased from May 3 to 6 at an average of HK$1.59 each. The trades, which accounted for 42 per cent of the stock’s trading volume, were made on the back of a 19 per cent rebound in the share price since February from HK$1.34. Despite the rebound in the share price, the counter is still down since June last year from HK$2.35. The stock closed at HK$1.60 on Friday.

Mainland private obstetrics and gynaecology specialty hospital group Harmonicare Medical bought back for the first time since listing in July last year with 1.7 million shares purchased from May 3 to 5 at HK$5.59 to HK$6.00 each or an average of HK$5.83 each. The trades, which accounted for 15 per cent of the stock’s trading volume, were made on the back of a 22 per cent rebound in the share price since March from HK$4.77. Despite the rebound in the share price, the counter is still down since November from HK$7.70. The group’s buyback prices were lower than the initial public offer prices of HK$6.80 to HK$7.55. The stock closed at HK$5.78 on Friday.

Commercial property developer China New City Commercial Development bought back for the first time since listing in July 2014 with 1.9 million shares purchased on Friday at HK$4.22 each. The trade was made on the back of the 63 per cent decline in the share price since March from HK$11.50. The stock is also sharply down since October last year from HK$12.76. Despite the fall in the share price, the counter is still up since September 2014 from HK$2.02. The company’s buyback price was higher than the IPO prices of HK$2.12 to HK$2.92. The stock closed at HK$4.20 on Friday.

Movie, television, and documentary producer and distributor SMI recorded its first buybacks since July last year with 10 million shares purchased from May 3 to 6 at an average of HK$0.74 each. The trades, which accounted for 11 per cent of the stock’s trading volume, were made on the back of a 23 per cent drop in the share price since December from HK$0.96. Despite the fall in the share price, the counter is still up since August last year from HK$0.49. The group previously acquired 44.15 million shares in July last year at an average of HK$0.73 each and 41.9 million shares from March to June 2000 at HK$1.62 to HK$0.63 each or an average of HK$1.12 each. Also positive this quarter is substantial shareholder Qin Hui with 71 million shares purchased on April 22 at HK$0.77 each, which increased his holdings to 7.610 billion shares or 56.34 per cent of the issued capital. He previously acquired 97 million shares on January 27 at HK$0.80 each. Qin became a substantial shareholder in April 2003 after he subscribed for an initial 1.100 billion shares or 44.87 per cent in the IPO. Overall, his stake is up by 26 per cent since that initial filing in April 2003. The counter closed at HK$0.72 on Friday.

Motive battery products manufacturer Tianneng Power International bought back for the first time since July last year with 10.6 million shares purchased from April 29 to May 6 at an average of HK$6.22 each. The trades, which accounted for 21 per cent of the stock’s trading volume, were made after the stock fell by 21 per cent from HK$7.85 on April 19. Despite the fall in the share price, the counter is still up since February from HK$5.08. The group previously acquired 4.5 million shares in July last year at HK$2.45 to HK$3.80 each or an average of HK$2.95 each. The repurchases since July were the company’s first buybacks since listing in June 2007. The stock closed at HK$6.12 on Friday.

Robert Halili is managing director of Asia Insider