Buyers lead trading last week with buy-backs by Xingda, Chaoyue, InvesTech, China Animation and Xingye Copper

23 companies recorded 101 purchases worth HK$131 million against 16 firms with 68 disposals worth HK$123 million, the previous week

PUBLISHED : Sunday, 16 October, 2016, 4:28pm
UPDATED : Sunday, 16 October, 2016, 11:16pm

Buying was high for the third straight week while selling among directors was high for the second straight week, based on filings on the Hong Kong stock exchange during the holiday-shortened week of October 11 to 14.

A total 23 companies recorded 101 purchases worth HK$131 million against 16 firms with 68 disposals worth HK$123 million.

The number of companies and trades on the buying side were consistent with the previous week’s five-day totals of 26 firms and 112 purchases. The buy value, however, was sharply up from the previous week’s acquisitions worth HK$82 million.

On the selling side, the number of companies was sharply up from the previous week’s 12 firms while the number of trades and value were consistent with the previous week’s 72 disposals worth HK$152 million.

Meanwhile, the buy-back activity rebounded with 16 companies that posted 91 repurchases worth HK$1.691 billion. The number of firms was not far off from the previous week’s 17 companies while the number of trades and value were up from the previous week’s 82 transactions worth HK$1.507 billion.

Buyers led the trading last week with more buy-backs by Xingda International at a higher price and first-time buys by directors in Chaoyue Group, InvesTech Holdings, China Animation and Xingye Copper International.

Initial purchases by directors are one of the most telling signs that a stock is undervalued, especially if the acquisitions were made several years following the directors’ appointment or listing date.

The chairmen of property plays Cheuk Nang Holdings and CIFI Holdings are testing higher waters this month as they resumed buying at higher than their previous acquisition prices.

Lastly, a newly appointed director of China Shengmu Organic Milk embarked on a heavy buying spree despite the sharp rebound in the share price this year.

Mainland radial tyre cords manufacturer Xingda International resumed buying back at a higher price with two million shares purchased from October 13 to 14 at an average of HK$3.15 each.

The group previously acquired 5.1 million shares from September 12 to 29 at an average of HK$2.96 each and 6.9 million shares from June 13 to July 22 at an average of HK$1.91 each.

Prior to the repurchases this year, the company acquired 37.3 million shares from October 2014 to October 2015 at HK$2.85 to HK$1.49 each or an average of HK$2.10 each and 21.3 million shares from September to October 2007 at an average of HK$2.55 each. Investors should note that executive director Tao Jinxiang acquired 414,000 shares from August 29 to September 29 at an average of HK$2.73 each, which increased his holdings to 594.081 million shares or 40.12 per cent of the issued capital. The purchases by Jin since August are his first on-market trades since the stock was listed in December 2006. The stock closed at HK$3.07 on Friday.

Executive director Luan Li recorded her first on-market trades in commercial and residential properties developer, consultancy services and e-commerce platforms provider Chaoyue since her appointment in August 2009 with 3.4 million shares purchased from October 11 to 12 at an average of HK$0.95 each. The trades increased her holdings by 57 per cent to 9.400 million shares or 0.05 per cent of the issued capital. The purchases were made on the back of the 102 per cent rise in the share price since August from HK$0.47. The counter is also up since January 2012 from HK$0.12. The stock closed at HK$1.12 on Friday.

Chairman and chief executive Ringo Chan Sek-keung recorded the first on-market trade by a director in network infrastructure solutions, network professional services and mobile internet software platform provider InvesTech since the stock was listed in November 2010 with two million shares purchased on October 12 at HK$1.41 each.

The trade increased his holdings to 112 million shares or 13.68 per cent of the issued capital. The acquisition was made on the back of the 51 per cent drop in the share price since March from HK$2.87. The counter is also down since June 2015 from HK$5.69. Despite the fall in the share price, the stock is still up since December 2012 from HK$0.74. Chan was appointed chief executive on September 21 but has served as director since December 2015. The stock closed at HK$1.36 on Friday.

Chairman and chief executive Zhuang Xiangsong recorded the first on-market trade by a director in animation derivative products trader China Animation Characters since the stock was listed in March 2015 with 2.82 million shares purchased on October 4 at HK$3.90 each.

The trade increased his holdings to 482.916 million shares or 55.3 per cent of the issued capital. The acquisition was made on the back of the 11 per cent drop in the share price since August from HK$4.40. Despite the fall in the share price, the counter is still up since March from HK$2.59. The chairman’s purchase price was between the IPO prices of HK$3.65 to HK$4.56. The stock closed at HK$3.54 on Friday.

Chief executive Hu Ming-lie recorded his first on-market trade in metal and steel manufacturer Xingye Copper since his appointment in November 2014 with 400,000 shares purchased on October 7 at 96 HK cents each. The trade doubled his stake to 800,000 shares or 0.1 per cent of the issued capital.

The acquisition was made on the back of the 17 per cent rebound in the share price since May from 82 HK cents. Despite the rebound in the share price, the counter is still down since December 2015 from HK$1.10. The counter closed at 97 HK cents on Friday.

Chairman Cecil Chao Sze-tsung resumed buying shares in property developer Cheuk Nang at higher than his acquisition prices earlier this year with 8,000 shares purchased from October 7 to 11 at an average of HK$5.95 each. The trades, which accounted for 5 per cent of the stock’s trading volume, increased his holdings to 355.528 million shares or 70.92 per cent of the issued capital. He previously acquired 5,000 shares on June 20 at HK$5.50 each, 6,000 shares on May 24 at HK$5.29 each and 60,000 shares from May 4 to 10 at HK$1.45 to HK$1.50 each or an average of HK$1.47 each (please note that the quoted transaction prices from May 4 to 10 in the filings were HK$1.45 to HK$1.50 but the stock’s market prices those days were HK$5.35 to HK$5.30). Aside from his purchases since May, Chao acquired 141,000 shares from March 17 to 22 at an average of HK$5.77 each and 7,000 shares on January 18 at HK$4.76 each.

Prior to his purchases this year, the chairman acquired 28,000 shares from September to December 2014 at an average of HK$6.83 each and 43,000 shares from January to March 2014 at an average of HK$7.26 each. The stock closed at HK$5.82 on Friday.

Chairman Lin Zhong resumed buying shares in mainland property developer and investor CIFI at higher than his previous acquisition prices with 2.28 million shares purchased on October 7 at HK$2.20 each. The trade increased his holdings to 3.41 billion shares or 50.62 per cent of the issued capital. Although the chairman resumed buying this month at a higher price, the acquisition was made on the back of the 17 per cent drop in the share price since September from HK$2.65. Despite the fall in the share price, the counter is still up since the second half of May from HK$1.70.

He previously acquired 4.48 million shares from May 10 to 16 at an average of HK$1.73 each. Prior to his purchases this year, Lin acquired five million shares in September 2015 at an average of HK$1.39 each, 16.64 million shares from June to July 2015 at an average of HK$1.72 each and 5.98 million shares in March 2015 at an average of HK$1.67 each.

Prior to his purchases since 2015, the chairman bought 74.9 million shares from March to October 2014 at HK$1.57 to HK$1.30 each or an average of HK$1.42 each and two million shares in October 2013 at HK$1.44 each. His recent purchase bodes well for shareholders as the stock rose by an average of 9 per cent six months following his purchases based on 168 acquisitions since 2013.

The stock recorded a price gain six months after on 82 per cent of those purchases. Investors should note that there were buy-backs by the company earlier this year with 18.5 million shares purchased from January 25 to 29 at an average of HK$1.41 each. The group previously acquired 90.34 million shares from August to September 2015 at HK$1.41 to HK$1.34 each or an average of HK$1.38 each. The repurchases since August 2015 are the company’s first buy-backs since listing in November 2012. The group’s buy-back prices were higher than the initial public offering price of HK$1.33. The stock closed at HK$2.23 on Friday.

Non-executive director Shao Genhuo recorded his first on-market trades in organic dairy products producer China Shengmu Organic Milk since his appointment on September 26 with 33.73 million shares purchased from October 7 to 12 at an average of HK$2.06 each. The trades, which accounted for 65 per cent of the stock’s trading volume, increased his holdings to 1.241 billion shares or 19.53 per cent of the issued capital.

The purchases were made on the back of the 38 per cent rebound in the share price since February from HK$1.49. Despite the rebound in the share price, the counter is still down since September 2014 from HK$2.48. Shao, 51, is the chairman of Beijing Dabeinong Technology Group (DBT), a company listed on the Shenzhen Stock Exchange. He is responsible for strategic planning and overall management of DBT. The stock closed at HK$2.18 on Friday.

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