The Insider
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Directors step in to prop up share prices with some rare first-time purchases amid sell-off

Chief executives of Taste.Gourmet Group and Wisdom Education International record first buys as directors since their companies were listed

PUBLISHED : Sunday, 19 August, 2018, 5:49pm
UPDATED : Monday, 20 August, 2018, 11:33am

The steep price falls in the recent market sell-off dictated most of the insider trading as directors moved in to support their companies’ shares, according to filings to the Hong Kong stock exchange.

Among the stocks that recorded insider buys following sharp fall in share prices were Yuan Heng Gas Holdings, Zhongsheng Group and Taste.Gourmet Group. The sudden drop in education stocks in the mainland last week because of uncertainty in how that sector will be regulated in the future, prompted the heads of China Maple Leaf Educational Systems and Wisdom Education International to buy heavily last week.

Overall, a total of 30 companies recorded 144 purchases worth HK$271 million based on filings on the Hong Kong stock exchange from August 13 to 17. The figures were sharply up from the previous week’s 17 firms, 85 purchases and HK$99 million. Meanwhile, a total of 14 firms posted 66 repurchases worth HK$1.75 billion based on filings from August 10 to 16. The figures were up from the previous five-day totals of 11 companies, 42 trades and HK$1.52 billion.

Buying by directors and listed firms surged last week, but the selling by directors fell with only four companies recording 19 disposals worth HK$131 million. The number of firms and trades were down from the previous week’s six companies and 35 disposals. The sell value, however, was sharply up from the previous week’s sales worth HK$29 million.

Wang Jianqing, chairman and CEO of oil and gas trader Yuan Heng Gas Holdings, recorded his first on-market trades in since September 2017, buying 33.4 million shares from July 27 to 30 at an average of HK$0.72 each. The trades, which accounted for 79 per cent of the stock’s trading volume, increased his holdings to 3.643 billion shares or 55.66 per cent of the issued capital. The purchases were made on the back of the 26 per cent drop in the share price since January from HK$0.96.

He previously acquired 235.84 million shares from September 19 to 22, 2017 at an average of HK$0.63 each. Those purchases were made on the back of a 19 per cent drop in the share price since February 2017 from HK$0.78.

The counter closed at HK$0.69 on Friday.

Huang Yi, chairman of car retailer Zhongsheng Group, recorded his first on-market trades since December 2017. He bought 2.02 million shares from August 13 to 15 at HK$16.84 to HK$15.46 each or an average of HK$16.24 each. The trades, which accounted for 7 per cent of the stock’s trading volume, increased his holdings to 1.31 billion shares or 57.67 per cent of the issued capital. The purchases were made after the stock fell by as much as 44 per cent from HK$27.85 in the first half of June.

The acquisitions were also made after the company announced on August 10 a 35.5 per cent gain in first-half profit to 1.83 billion yuan (US$266.2 million). He previously acquired 413,000 shares from November 30 to December 6, 2017 at HK$15.94 to HK$15.34 each or an average of HK$15.44 each and 25.3 million shares from April to December 2016 at HK$3.68 to HK$7.33 each or an average of HK$4.99 each.

Before his trades since 2016, the chairman acquired 10.57 million shares in July 2015 at an average of HK$4.52 each and 25.3 million shares from August 2011 to October 2014 at HK$12.96 to HK$7.60 each or an average of HK$9.25 each.

The stock closed at HK$16.04 on Friday.

Chan Wai Chun, CEO and co-founder of restaurant group Taste.Gourmet Group, posted the first on-market trades by a director since the stock was listed on January 18. She bought 3.58 million shares from August 9 to 16 at HK$0.70 to HK$0.76 each or an average of HK$0.74 each. The trades, which accounted for 95 per cent of the stock’s trading volume, increased her holdings to 253 million shares or 64.3 per cent of the issued capital.

The CEO recorded buys on every day during that six-day period. The purchases were made after the stock fell by as much as 25 per cent from HK$0.93 in January. The CEO’s purchase prices were below the IPO price of HK$0.92.

The counter closed at HK$0.75 on Friday.

Sherman Jen Shu Liang, founder, chairman and CEO of international school operator China Maple Leaf Educational Systems, recorded his first on-market trades since December 2017, buying 6.5 million shares from August 2 to 15 at HK$6.65 to HK$4.42 each or an average of HK$5.56 each. The trades increased his holdings to 1.49 billion shares or 50.21 per cent of the issued capital. The purchases were made after the stock fell by as much as 41 per cent from HK$7.50 in June.

Despite the fall in the share price, the CEO’s acquisitions were made at higher than his previous trade prices based on the 4.83 million shares that he acquired from November 30 to December 6, 2017 at an average of HK$4.10 each. Before those acquisitions, the CEO sold 293,000 shares from November 2015 to May 2017 at HK$1.50 to HK$4.25 each or an average of HK$3.61 each and bought 2.4 million shares from December 2014 to September 2015 at HK$1.12 to HK$0.89 each or an average of HK$1.08 each.

The stock closed at HK$3.73 on Friday.

Li Suwen, CEO of mainland private education services provider Wisdom Education International, recorded the first trades by a director since the stock was listed in January 2017. She bought 1.3 million shares from August 13 to 15 at HK$4.97 to HK$4.24 each or an average of HK$4.70 each. The trades increased her holdings to 571.3 million shares or 27.96 per cent of the issued capital. The purchases were made after the stock plunged by as much as 43 per cent from HK$7.38 on July 27.

The stock closed at HK$4.13 on Friday.

Robert Halili is managing director of Asia Insider

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