Shortly after the stock price continued to slump and was sold off by big funds, Huatai Securities (601688. Sh; 06886. HK).
On July 7, Huatai Securities announced that on July 6, it received a notice from the largest shareholder, Jiangsu Guoxin Group Co., Ltd. (hereinafter referred to as “Guoxin group”), that Guoxin group increased its holding of 2.3636 million H shares of the company through Hongkong stock connect, accounting for about 0.026% of the total shares of the company.
Based on the average price of H shares of Huatai Securities on July 6 of HK $10.83 per share, Guoxin group spent about HK $25.5978 million. After the increase, Guoxin group will hold 1.352 billion shares of Huatai Securities, accounting for 14.89% of the total shares.
Since the beginning of the year, Huatai Securities, known as the “retail concentration camp”, has a cumulative decline of 13.88% in the A-share market, greatly underperforming the market index. At the same time, the Hong Kong stock market also fell by 10.66%, reaching a new low in nearly a year on July 6.
Can the increase of the largest shareholder help the stock price of Huatai Securities decline?
The largest shareholder holds more shares to protect the market
This is not the first time Guoxin group has increased its holdings of Huatai Securities.
From July 2018 to June 2020, it has increased its holdings of Huatai Securities four times, accumulating 98.305 million shares, with an increase of more than 1.2 billion yuan.
This time, Guoxin group announced its plan to increase its holdings of Huatai Securities, which is about a year away from the last round of increase. The last increase was from April 3, 2020 to June 4, 2020. Guoxin group increased its holdings of 20.094 million H shares of Huatai Securities through Hongkong stock connect.
Huatai Securities also pointed out in the announcement that based on its confidence in the future development of the company, Guoxin group plans to continue to increase its H shares in its own name in the next six months (from the date of this increase) through Hong Kong stock connect. Including the increased shares, the cumulative proportion of the increased shares is not less than 0.1102% (10 million shares) of the total shares of the company, No more than 0.5% of the total shares of the company. In terms of the lower limit of 10 million shares and the current share price, the current round of increase will cost more than HK $100 million. Guoxin group undertakes not to reduce its holdings of Huatai Securities during the implementation period of the increase and within the legal period.
On July 7, an insider of Huatai Securities told the times weekly that the company has successively implemented fixed increase and dilution of shares in the past two years, which has led to a significant decrease in the shareholding ratio of Guoxin group, which has also led to a decrease in the shareholding ratio of the actual controller. The continuous increase is mainly to maintain the attribute of state-owned enterprises and ensure the control right of state-owned assets.
According to the 2020 annual report of Huatai Securities, Guoxin group, Jiangsu communications holding and Jiangsu high investment, three wholly-owned enterprises under Jiangsu SASAC, together hold about 24.13% of the shares of Huatai Securities. Its China Information Group holds 1.271 billion a shares of Huatai Securities, and holds 78.1606 million H shares of Huatai Securities through Hongkong stock connect.
Reprint indicated source：Shine Trader Limited Live information