It
is common belief that when key appointment holders or majority
shareholders start to accumulate shares of their own companies, it is
usually a strong indication that the company is doing well and its share
price is likely to follow suit. Naturally, who else could be more
familiar with the performance of the companies other than the people who
are actually running the show themselves?
There may be plenty of
reasons for one to sell his shares but when he does buy shares, it
could only be for one particular reason. And that is – to make money.
That said, let us look at three stocks which recently experienced
significant insiders buying.
Yangzijiang Shipbuilding
Yangzijiang Shipbuilding (Holdings) (YZJ) announced
on 31 August 2017 a share placement of 137 million new shares at $1.53
per share to raise net proceeds of around $209 million. Upon the
announcement, share price plunged by more than 13.8 percent from the
close on 30 August 2017 at $1.625 to $1.40 as of 27 September 2017.
The group intends to use up to half of the net proceeds to fund new investments and business expansion through acquisitions, and the remaining for working capital and general corporate purposes including the repayment of bank loans and debts.
The group intends to use up to half of the net proceeds to fund new investments and business expansion through acquisitions, and the remaining for working capital and general corporate purposes including the repayment of bank loans and debts.
As YZJ’s finance strength
was robust with a net cash of Rmb1.1 billion before the placement,
doubts were raised with regard to the need to raise funds, and there
were speculations that the group was preparing for major mergers and
acquisitions activities. Other possible explanations include enhancing
liquidity due to tightened capital controls arising from certain
high-profile incidents in China.
Yangzi International Holdings lent out 137 million shares to facilitate in the share placement, which is beneficially owned by the YZJ Settlement in which Ren Yuanlin, chairman of YZJ, is deemed interested in. Pursuant to the full settlement of the loan of the shares, Ren’s deemed interest in YZJ has enlarged from 22.7 percent to 25.4 percent as of 25 September 2017.
Yangzi International Holdings lent out 137 million shares to facilitate in the share placement, which is beneficially owned by the YZJ Settlement in which Ren Yuanlin, chairman of YZJ, is deemed interested in. Pursuant to the full settlement of the loan of the shares, Ren’s deemed interest in YZJ has enlarged from 22.7 percent to 25.4 percent as of 25 September 2017.
Health Management International
Health Management International (HMI) owns and operates two tertiary hospitals in Malaysia – namely Regency Specialist Hospital (Regency) in Johor as well as Mahkota Medical Centre (Mahkota) in Malacca.
Mahkota, one of the most comprehensive cancer centre South of Kuala Lumpur, has plans to increase its capacity by adding 34 beds to its existing 266 beds making it to 300 beds in FY18. In addition, the medical centre stands to benefit from more flight routes for the Malacca airport in October 2017, which currently only offers flights to Pekanbaru and Penang.
Meanwhile, following a successful turn-around in 2014, HMI has confirmed its plans to double Regency’s bed capacity from the current 218-beds to an eventual 500-beds hospital. Construction of the new extension block is expected to commence in FY18 and slated for completion by FY21 at an estimated cost of RM160 million.
Both hospitals continue to register healthy patient growth as patients volume grew 3.7 percent year-on-year in 4Q17 and the growth of foreign patients has outpaced local patients. With the acquisition of 100 percent stake in the two hospitals completed in March 2017, higher earnings contribution due to the full ownership structure can be expected.
Dr Gan See Khem, Executive Chairman of HMI, has accumulated about 829,000 HMI shares through Nam See Investment over the last two week between the range from $0.635 to $0.655. As at 22 September 2017, Dr Gan’s deemed interest in HMI has grown eight basis points to 39.8 percent.
According to a research report by Maybank Kim Eng on 25 August 2017, the brokerage house maintained a BUY rating on HMI with a price target of $0.80.
Mapletree Logistics Trust
Mapletree Logistics Trust (MLT) recently entered into an agreement to acquire Mapletree Logistics Hub Tsing Yi in Hong Kong from its sponsor, Mapletree Investments, at a consideration of HK$4.8 billion.
The acquired building is an 11-storey ramp-up warehouse with a net lettable area of 148.1k square meter. The property has remaining leasehold of 46 years, located in a strategic location to the city centre, and will be 100 percent occupied by October 2017. The agreed acquisition price is attractive as it translated into a net property income (NPI) yield of 5.7 per annum and is about 2.4 percent below valuation.
The acquisition is estimated to lift MLT’s asset
under management and NPI by 15 percent and 14 percent respectively. In
addition, it is also expected to be distribution per unit accretive,
although aggregate leverage will edge up marginally to 38 percent.
As a result of a purchase of 600,000 units by DBS Group Holdings via a market transaction, major shareholder Temasek Holdings (Temasek) deemed interests in MLT have inched up to 40 percent as at 14 September 2017. Temasek’s deemed interests in MLT arise from the aggregation of interests held by DBS Group Holdings and Mapletree Investments.
A research report by Maybank Kim Eng released on 29 August 2017 revealed that the broker maintained a HOLD rating on MLT, giving it a target price of $1.20.
As a result of a purchase of 600,000 units by DBS Group Holdings via a market transaction, major shareholder Temasek Holdings (Temasek) deemed interests in MLT have inched up to 40 percent as at 14 September 2017. Temasek’s deemed interests in MLT arise from the aggregation of interests held by DBS Group Holdings and Mapletree Investments.
A research report by Maybank Kim Eng released on 29 August 2017 revealed that the broker maintained a HOLD rating on MLT, giving it a target price of $1.20.
Source - Sharesinv.com
