Directors busy buying company shares

Trades remain high for fifth week with 129 deals worth HK$142m, while sales climb to HK$85m

PUBLISHED : Monday, 23 September, 2013, 12:00am
UPDATED : Monday, 23 September, 2013, 4:03am

Buying by directors of shares in their own companies was high for a fifth consecutive week, with 28 firms posting 129 purchases worth HK$142 million in the holiday-shortened week.

The number of companies and trades was consistent with the previous week's 35 companies and 155 purchases, but the value was sharply lower than the HK$292 million.

Selling rose, with 17 companies reporting 70 disposals worth HK$85 million, against the previous week's 14 companies with 62 deals valued at HK$66 million.

Most of the insider trades were purchases in Sihuan Pharmaceutical, Sino Biopharmaceutical, Wing Lee and Labixiaoxin Snacks.

Chairman and chief executive Che Fengsheng bought nine million shares of Sihuan at an average of HK$4.87 each, 80 per cent higher than the cost of his acquisitions last year.

The trades increased Che's holdings to 3.072 billion shares or 59.38 per cent of the company's issued capital.

Che previously bought five million shares from January to May last year at an average of HK$2.70 each and 15.5 million shares from September to October 2011 at an average of HK$2.91 per share.

He resumed buying this month after a company owned by him and another firm sold 350 million shares or 6.8 per cent of the issued capital on September 12 at HK$5.40 each.

The stock closed at HK$5.20 on Thursday.

Executive director Tse Hsin recorded his highest acquisition price in biotechnology and Chinese medicinal firm Sino Biopharmaceutical since he started buying the company's shares in September 2005, paying HK$4.78 each for 2.04 million shares. The trade raised his holdings to 41.15 million shares or 0.83 per cent of the issued capital.

The acquisition was made after the stock fell 17 per cent from HK$5.74 on September 6.

Tse bought 22.8 million shares on June 24 at HK$4.59 each, 6.5 million shares in December last year at HK$3.82 each, and 15.74 million shares from January to June last year at an average of HK$2.03 each.

The stock last traded at HK$4.92.

At Wing Lee, chairman and chief executive Chris Chow Tak-hung made his first on-market trades in the electronic components manufacturer since May 2010, picking up 1.47 million shares at an average of 55 HK cents each. This increased his holdings to 223.84 million shares or 69.84 per cent of the company.

The acquisitions were made after the stock rebounded from 47 HK cents on September 2.

Despite the rebound, the counter is still down from March's HK$1.94.

Chow bought 22.4 million shares from May 2007 to May 2010 at an average of 68 HK cents each and 1.79 million shares from August to September 2004 at HK$3.36 each.

The recent purchases bode well for shareholders as the stock rose an average of 22 per cent six months after Chow bought shares, based on 116 acquisitions since 2004. The stock showed gains after six months in 64 per cent of those purchases.

The counter closed at 65 HK cents on Thursday.

Chairman Zheng Yulong is the first director to trade in snack food and jelly products manufacturer Labixiaoxin since the company was listed in December 2011.

Zheng bought 1.1 million shares at HK$3.79 each, lifting his holdings in the firm to 722.22 million shares or 63.77 per cent.

The acquisition was made on the back of a 17 per cent drop in the share price from HK$4.56 in May. Despite the fall, the counter is still up from HK$1.99 in January last year.

Zheng's purchase price was sharply higher than the stock's listing price of HK$2.65. The purchase was made two weeks after the firm reported a 16 per cent gain in net profit to 186.72 million yuan (HK$236.5 million).

The stock ended trading last week at HK$3.98.

Robert Halili is the managing director of Asia Insider