Recently, some high-ranking executives of Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd, Shenzhen Coship Electronics Co., Ltd and Tangshan Jingyuan Yufeng Electronics Co., Ltd dumped shares of their own companies. The website of Shenzhen Securities Exchange disclosed that Lin Guanyu and Wu Cailian, both high-ranking executives of Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd, sold 1,554,000 and 270,440 shares respectively of their company in the secondary market, accounting for 20.62% of the day trade volumne of the company. Besides, Wu sold 20,000 shares the day before. After dumping their shares, Lin got 121 Mln RMB and Wu got 22.515 Mln RMB. Lin is Wu’s brother-in-law.

On 3 Aug 2007, Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd announced that Lin Guanyu had sold 1.554 Mln shares of the company by 2 Aug 2007, accounting for 1.63% of the total shares. The average price is 78.07 RMB per share. At that point Lin still held 12.438 Mln shares, accounting for 13.02% of the total. From 20 Jul to 6 Aug, the stock price of Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd rose dramatically, from 49 to 84 RMB. On 2 Aug, this stock reached the upper trading limit. On 31 Jul, the company announced its net profits increased by 1325.9% compared with the same period last year.

Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd has experienced great fluctuation in its share price over the past several years. In 2005, the EPS (Earnings per Share) of the company was only 0.30 RMB, and 0.028 RMB in 2006. But this year, this figure jumped to 0.92 RMB. “Although we don’t know why Lin Guanyu sold so many shares, we can’t conclude that the stock price of the company has reached the maximum, or there is any loss of confidence toward the company,” spokes person of Xinfu Pharmaceutical Co., Ltd, announced.

Other announcements show that 4.77 Mln shares, held by Lin Guanyu, will be relisted on 13 Aug 2007, and 4.43 Mln on 13 Aug next year. Wu Cailian will have 1.93 Mln relisted shares on 13 Aug 2007. Pan Yulong and Gao Changling, two vice presidents of Shenzhen Coship Electronics Co., Ltd., also sold large blocs of shares of their company. Pan sold 178,200 shares at the price of 3.979 Mln RMB, while Gao sold 210,000 shares at the price of 4.914 Mln RMB. Particularly, 75% of Pan and Gao’s shares will be frozen soon as they are the shares of high-ranking exectutives.

There is a similar situation with Tangshan Jingyuan Yufeng Electronics Co., Ltd. In July, Wang Xiaodong, president of the board of supervisors, sold 29,300 shares in his company. Another 3 high-ranking executives also sold a great number of shares. They got 1.873 Mln RMB in total after they sold the stock.

From: Shanghai Securities News

Date: 15 Aug 2007