| Written by The NextInsight Team | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monday, 10 May 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AS THE MARKET turned down last week because of the Greek crisis, a number of companies bought back shares. So did management or substantial shareholder in some cases. They are reflected in the two tables we have compiled on this page, although the compilation is not exhaustive. Perhaps because of the buying, which probably reflected the goodunderlying business fundamentals, these companies’ stock prices were well supported in the past week. More companies and company directors can be expected to buy shares if the market weakness persists. They could do so when they come out of a blackout period once their Q1 results are announced. The SGX Listing Rules state that a listed issuer and its officers "should not deal in the listed issuer’s securities during the period commencing two weeks before the announcement of the company financial statements for each of the first three quarters of its financial year and one month before the announcement of the company's full year financial statements (if required to announce quarterly financial statements), or one month before the announcement of the company's half year and full year financial statements (if not required to announce quarterly financial statements)". For Q1, a number of companies have reported a strong recovery in their profits, and last week was as good an opportunity as any for the company or directors or substantial shareholders to buy shares in a weak market. For example: * China Animal Healthcare: After buying 2.2 m shares last week, fund manager FMR LLC now owns 6% of this company, or 93,571,000 shares. The company has just reported net earnings rising 46.3% in Q1 to RMB36.6 million. Adding to the good news, after not declaring a dividend for FY09, it surprised with a RMB0.02 dividend for Q1. * Hotung Investment: The 1.55 m shares bought back last week amounted to about S$270,000, which is not terribly significant. But it is noteworthy that the company has been an aggressive buyer prior to that - ie, after announcing sterling Q1 results. Q1 net profit was NTD78.5 m compared to a mere NTD 8.9 m in Q1 of 2009, or a 779% jump. Since announcing the result, it has bought back 13.5 m shares. In 2009, it was truly aggressive: It purchased 19.9 m shares in the open market and 97.5 m off-market. And it cancelled all the shares purchased, in total representing 9.59% of the company’s issued share capital. Shareholders can only welcome such a move.
* Changtian Plastic: Its 4Q09 revenue was up 144.2% to RMB253.2 million while its net profit jumped 191.5% to RMB66.1 million. As at end-2009, it had cash and bank balances of RMB461.7 million (S$96 million) versus a market capitalization of about S$150 m based on the recent stock price of 22.5 cents. Seeing value in the stock, Andrew Barron Worden has been accumulating, and now owns 56.5 million shares (in direct and deemed interests). That's a hefty 8.56% of the share capital of Changtian. (It's an S-chip, in case you didn't know) Update: Changtian has just announced that its Q1 net profit jumped 385.8% to RMB55.4 million. Likely due to seasonal fluctuation, this is lower than the RMB66.1m achieved in Q4 of last year. Group revenue in Q1 tripled to RMB229.2 million. |
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework. ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
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