Hongqiao’s founder raises his stake to 82 per cent, over single-ownership limit

PUBLISHED : Sunday, 05 November, 2017, 6:33pm
UPDATED : Sunday, 05 November, 2017, 10:30pm

Insider activity plunged during the week of October 30 to November 3, with fewer company executives and controlling shareholders buying stocks, while disposals also fell sharply compared with the previous week.

The number of companies that exercised buy-backs was little changed last week, although their buy-back value rose 27 per cent compared with the previous period, with 18 of them filing 78 buy-backs valued at HK$1.457 billion (US$186.8 billion).

Hong Kong’s benchmark Hang Seng Index rose 0.6 per cent last week, extending this year’s 30 per cent increase. The buoyant stock market spurred various unidentified directors at Xinhua News Media Holdings - the broadcast operator that also runs a professional cleaning service - to dispose of their shares. Six transactions valued at HK$7.7 million were recorded last week, at an average price of 28 Hong Kong cents per share, lower than the Friday closing price of 35.5 Hong Kong cents.

Wong’s Kong King International (Holdings), a maker of electronic components, bought back its stock for the first time since 2000, spending HK$1.75 million on 1.532 million shares at an average price of HK$1.14. The stock fell 0.8 per cent to HK$1.19 on Friday.

Zhang Shiping, founder and chairman of China Hongqiao Group, which produces aluminium products, made the biggest insider purchases of the week, spending HK$568.5 million in 12 transactions buying his own stock, at an average price of HK$10.14 per share, 23 per cent lower than the stock’s Friday closing price. His purchase raised his personal holdings in Hongqiao to 5.945 billion shares, or almost 82 per cent of the company’s issued capital, exceeding the private shareholder limit by almost 7 percentage points.

Significant Points

  • Chairman Zhang recorded his first on-market trades since November 2015
  • Zhang’s purchases accounted for 20 per cent of the stock’s trading volume
  • Last week’s transactions came after the stock more than tripled since his last purchases in 2015
  • The recent purchases were made after Hongqiao announced on October 27 a 54.8 per cent drop in first-half profit to 1.482 billion yuan

At Dragon Crown Group Holdings, a specialist in the storage of liquid chemicals, founder and chairman Ng Wai-Man continued accumulating his company’s shares, spending HK$150 million to bolster his holdings by 14 per cent to 73.16 per cent.

Significant Points

  • Ng’s purchase is his largest single-day acquisition since he started buying the company’s shares in August 2011
  • The recent purchase is significantly more than his daily buying average of HK$230,000 from 2011 to September 2017

At Ten Pao Group Holdings, which makes switching power supply units, several directors disclosed their first insider transactions since the company’s 2015 listing. Chairman Hung Kwong-Yee raised his holdings to 64.14 per cent, while independent director Lam Cheung-Chuen bought one million shares at HK$2.05 each. The stock rose 1.5 per cent to close at HK$2.01 on Friday.

Significant Points

  • Two directors recorded the first insider trades in Ten Pao since listing, buying the stock at substantial premiums to the stock’s IPO price of 55 Hong Kong cents
  • The purchases accounted for 13 per cent of the stock’s trading volume
  • Chairman and founder Hung Kwong-Yee boosted his stake to 64.14 per cent, while independent director Lam Cheung-Chuen boosted his stake by 500 per cent
  • Ten Pao announced in August a 22.2 per cent gain in first-half profit to HK$92.7 million