YangZiJiang: CS maintains O/p with $2.00 TP. Note that substantial shareholders of grp have undertaken a restructuring exercise to streamline the shareholdings structure of Co. In particular, Chairman Ren is now the sole shareholder of Newyard Worldwide Holdings Ltd, which holds a 26.06% (23.03% previously) stake in Yangzijiang.
House believe this provides more clarity on his stake in Co. in contrast to the previous cross-holding structure. At the same time, it raises questions about the disposal of 1.26% stake by HK Hengyuan to an undisclosed shareholder as well as the 4.80% stake held by Almond Beach Resources Corp, which can’t be monitored as it is below the 5% level.
Given the recent share price weakness, mgt has stepped in to purchase shares. Chairman Ren purchased 1.9m shares in the past two mths, while Executive Director Yu Kebing purchased 300,000 shares. House believe further price decline will trigger a corporate share buyback.
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