The Insider
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Share selling by directors rises for third straight week

Significant insider trades by Wharf, Semiconductor Manufacturing International, Hilong, World Houseware and Genscript Biotech

PUBLISHED : Sunday, 04 December, 2016, 3:49pm
UPDATED : Monday, 16 January, 2017, 10:28am

Buying was flat while selling among directors rose for the third straight week based on filings on the Exchange from November 28 to December 2.

A total of 31 companies recorded 178 purchases worth HK$278 million versus 19 firms with 73 disposals worth HK$80 million. The buy figures were consistent with the previous week’s 33 companies, 163 purchases and HK$323 million.

Sales, on the other hand, were sharply up from the previous week’s 15 firms, 53 disposals and HK$44 million. The slowdown in the buying in the past two weeks coupled with the surge in the selling in the past three weeks indicates a lack of confidence by directors in this recent market rally which started in mid-November.

Meanwhile, buyback activity remained high based on filings from Monday to Thursday with 20 companies that posted 112 repurchases worth HK$1.175 billion.

The number of firms and trades were not far off from the previous week’s 5-day totals of 20 companies, 118 transactions and HK$1.55 billion.

With the surge in the selling last week, the bulk of the significant insider trades were disposals with sales in Wharf (Holdings) Limited, Semiconductor Manufacturing International, Hilong Holding, World Houseware (Holdings) and Genscript Biotech Corporation. The sales in these five companies were made following the sharp rise in their share prices this year.

CFO Tsui Yiu Cheung recorded his first on-market trades in property play and container terminals and communications services provider Wharf (Holdings) Limited since May 2013, with 300,000 shares sold from November 28 to 29 at an average of HK$55.35 each.

The trades reduced Tsui’s holdings by 12 per cent to 2.200 million shares or 0.07 per cent of the issued capital. The disposals were made on the back of the 54 per cent rebound in the share price since the last week of January from HK$36.00. Despite the rebound in the share price, the counter is still down since January 2015 from HK$63.00.

Tsui previously sold 300,000 shares in May 2013 at HK$76.10 each. That sale was well-timed as the counter fell by more than 38 per cent to HK$47.20 in March 2014. Another director that has sold shares this quarter is deputy chairman Stephen Ng Tin Hoi with 800,000 shares sold from October 31 to November 1 at an average of HK$58.94 each, which lowered his stake by 10 per cent to 7.004 million shares or 0.23 per cent. He previously sold 280,000 shares from March to April 2002 at an average of HK$18.13 each. The stock closed at HK$55.65 on Friday.

CFO Gao Yong Gang recorded his first on-market trade in integrated circuits manufacturer and trader Semiconductor Manufacturing International Corporation since January 2015 with 1.46 million shares sold on November 24 at HK$1.06 each.

The trade reduced his holdings by 7 per cent to 20.495 million shares or 0.05 per cent of the issued capital. The sale was made on the back of the 80 per cent rebound in the share price since May from HK$0.59. He previously sold 600,000 shares in January 2015 at HK$0.71 each.

Gao was appointed to the board in 2009. Also negative this month is its CEO Tzu Yin Chiu with 16.2 million shares sold from November 14 to 18 at an average of HK$1.06 each, which lowered his stake by 11 per cent to 128.715 million shares or 0.3 per cent.

A large portion of the sales were made at a profit based on the 12 million shares that he acquired via exercise of options from November 14 to 18 at HK$0.455 each. He previously sold 3.9 million shares in October 2014 at HK$0.80 each. Prior to his disposals since 2014, the CEO acquired 3.47 million shares in July 2012 at an average of HK$0.24 each. Tzu joined the Group in August 2011. The stock closed at HK$1.00 on Friday.

Independent non-executive director Lee Siang Chin recorded sales in oil field equipment and services provider Hilong Holding at higher than his acquisition prices from July 2015 to June this year with the sale of his entire holdings of 1.000 million shares from November 24 to 25 at HK$2.36 each.

The shares sold represented 0.06 per cent of the issued capital. The disposals were made on the back of the 52 per cent rise in the share price since October from HK$1.55. The counter is also up since July from HK$0.84.

He previously acquired 500,000 shares in from June 28 to 29 at HK$0.80 each and an initial 500,000 shares in July 2015 at an average of HK$1.88 each. Prior to his trades since 2015, Lee sold his entire holdings of 800,000 shares in July 2014 at an average of HK$4.45 each and purchased 400,000 shares in April 2013 at HK$2.75 each. Prior to those transactions, he sold 500,000 shares in December 2012 at HK$2.65 each. Lee was appointed to the board in December 2010. The stock closed at HK$2.23 on Friday.

Executive directors Lee Pak Tung and Kwong Bau To recorded sales in household products manufacturer and distributor World Houseware (Holdings) with a combined 1.07 million shares sold from November 10 to 23 at an average of HK$0.836 each.

The trades, which accounted for 12 per cent of the stock’s trading volume, were made on the back of the 82 per cent rebound in the share price since February from HK$0.46. Despite the rebound in the share price, the counter is still down since June 2015 from HK$1.08.

Executive director Lee Pak Tung recorded his first on-market trades since June 2015 with 12,000 shares sold on November 10 and a further 288,000 shares on November 23 at an average of HK$0.83 each. The trades reduced his holdings by 6 per cent to 4.466 million shares or 0.6 per cent of the issued capital. He previously sold one million shares in June 2015 at an average of HK$0.665 each.

Executive director Kwong Bau To, on the other hand, recorded his first on-market trades since August 2007 with 768,000 shares sold from November 21 to 23 at an average of HK$0.838 each, which lowered his stake by 51 per cent to 735,000 shares or 0.1 per cent.

The disposals were made at a profit based on the 1.5 million shares that he acquired via exercise of options on November 10 at HK$0.58 each. He previously sold 1.08 million shares in August 2007 at HK$0.56 each.

Kwong was appointed to the board in September 2005. Also negative this quarter is vice chairman Lee Chun Sing with 470,000 shares sold on October 12 at HK$0.90 each, which reduced his holdings to 311.238 million shares or 41.57 per cent. He previously sold 194,000 shares from August 31 to September 1 at an average of HK$0.61 each and 50,000 shares on June 2015 at HK$1.17 each. Lee joined the Group in 1985. The counter closed at HK$0.76 on Friday.

Chairman and CEO Zhang Fang Liang and vice president of finance Meng Jian Ge took profits on the 1.27 million shares that they acquired in life sciences research products and services manufacturer and distributor Genscript Biotech Corporation via options on November 22 at HK$0.597 to HK$0.798 each.

They sold those shares on the same day at HK$3.77 to HK$3.91 each or an average of HK$3.90 each. The sales were significant as the directors opted to sell on the back of the 207 per cent rise in the share price since August from HK$1.27.

Chairman Zhang Fang Liang resumed selling at a higher price with 1.2 million shares sold on November 22 at HK$3.90 each. The trade reduced his holdings to 1.042 billion shares or 61.77 per cent of the issued capital. He previously sold 1.9 million shares on November 9 at HK$3.43 each and 2.7 million shares from October 24 to 25 at HK$2.84 to HK$2.70 each or an average of HK$2.71 each.

Dr Zhang was appointed to the board in May 2015.

Vice president Meng Jian Ge, on the other hand, sold 68,000 shares on November 22 at HK$3.77 each, which lowered his stake to 5.762 million shares or 0.34 per cent. Meng was appointed to the board in August 2015. The disposals by these two executive directors since October are the first on-market trades by a director of the company since the stock was listed in December 2015.

The directors’ sale prices were higher than the IPO prices of HK$1.31 to HK$1.68. The stock has continued to climb, closing at HK$4.00 on Friday.

Robert Halili is managing director of Asia Insider Limited

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