Insider Buying at Selected Chinese Property Developers

Most real estate developers in China have reported strong contract sales in 2017 and enjoyed significant share price appreciation.  It is somewhat surprising to see that insiders have recently been adding to their holdings.

Recap of share valuation and returns:

Comps

In several cases (CIFI, SCE, and Yuzhou) it appears that purchases were intended to signal that completion of a secondary offering by the company did not indicate any reduction in the Chairman’s confidence in the company’s potential.

Future Land Development

Following shareholder rejection of his HK$3.30/share privatization offer, Chairman Wang Zhenhua has raised his ownership stake to 73.7% through open market purchases of 66mm shares at prices from HK$4.04 to HK$4.93.

CIFI Holdings

Following the company’s private placement in July at HK$3.50/share to Ping An as a new strategic investor and a small additional placement at HK$3.82, entities controlled by CIFI’s co-founders  have raised their combined stake to 57.2% through open market purchases of 21.6mm shares at prices from HK$3.99 to HK$4.49.

China SCE Property

Following the company’s private placement in August at HK$3.64/share, Chairman Wong has raised his stake to 52% through open market purchases of 16.3mm shares at prices from HK$3.35 to HK$3.48.

Yuzhou Property

Following the company’s private placement in September at HK$4.53/share, Chairman Lam  has raised his stake to 62% through open market purchases of 1.7mm shares at prices from HK$4.16 to HK$4.21.

KWG Property

Chairman Kong raised his stake to 61% through open market purchases of 9.4mm shares at prices from HK$7.39 to HK$8.87.

Central China, Fantasia, and Xinyuan

No transactions.

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