Food and beverage buybacks strong due to low share prices
Dairy firms out in front as Huishan Dairy picks up a further 25.75 million shares in buying spree
The director activity remained high with 49 companies that recorded 264 transactions worth HK$1.72 billion based on filings on the exchange from October 20 to 24. The figures were consistent with the previous week's 57 firms, 258 trades, and HK$1.27 billion. A total of 39 companies recorded 214 purchases worth HK$821 million last week versus 11 firms with 50 disposals worth HK$899 million.
The buying was high in food and beverage stocks due to sharp fall in share prices in this sector in the past year. There were more buybacks by China Huishan Dairy last week along with insider buys in Changshouhua Food, China Modern Dairy, and YuanShengTai Dairy Farm.
Dairy products producer China Huishan Dairy was a lead story last week following initial buybacks of 15.4 million shares from October 15 to 17 at an average of HK$1.75 each. Those were the group's first buy-backs since listing in September 2013. The group ramped up its activity last week with a further 25.75 million shares purchased from October 20 to 22 at an average of HK$1.76 each.
Overall, the group has bought back 41.2 million shares in the past two weeks worth HK$72 million. The buy-backs were hefty as they accounted for 26 per cent of the stock's trading volume. The company's buy-back price was sharply lower than the initial public offering price of HK$2.67. The stock closed at HK$1.77 on Friday.
Chairman and chief executive Wang Mingxing acquired shares of edible corn oil products producer Changshouhua Food at higher than his sale price in June 2013 with 2.7 million shares purchased from October 13 to 21 at HK$6.01 to HK$6.25 each or an average of HK$6.10 each. Although the shares were acquired this month at higher than Wang's sale price last year, the purchases were made on the back of the 26 per cent drop in the share price since June from HK$8.19. The counter is also sharply down since December 2013 from HK$10.04. The stock closed at HK$6.40 on Friday.
Founder and chief executive Gao Lina picked up where she left off in raw milk producer Modern Dairy in June with 5.2 million shares bought on October 20 at an average of HK$3.10 each. The trades increased her holdings to 265.538 million shares or 5.5 per cent of the issued capital. The purchases were made on the back of the 26 per cent drop in the share price since September from HK$4.18. The company announced its interim results in August with profit up by 240 per cent to 523 million yuan. The stock closed at HK$3.23 on Friday.
Chairman Zhao Hongliang recorded the first on-market trades by a director in raw milk producer and distributor YuanShengTai Dairy since the stock was listed in November 2013 with 10 million shares purchased from October 20 to 21 at an average of HK$1.06 each.
The trades increased his holdings to 1.35 billion shares or 34.54 per cent of the issued capital. The acquisitions were made on the back of the 29 per cent drop in the share price since August from HK$1.49. The counter is also sharply down since November 2013 from HK$2.59. The chairman's purchase price was lower than the offer price of HK$2.70.
The group announced its interim results in August with profit up by 150 per cent to 249 million yuan. The stock closed at HK$1.08 on Friday.
