Chinese stocks have bounced back recent weeks, however Asia Markets research shows a handful of insiders – including tech billionaires and investment banks – have been aggressively selling into the market rally.
An insider selling shares is not what you want at a company you’re invested in. It can often be a sign of bad news to come or structural business decline. However, there are also occasions when insiders have legitimate personal reasons for the sales. You be the judge.
Here’s the insiders who have be cashing in.
Richard Liu – JD.com
Founder and Chairman of Chinese ecommerce giant, JD.com (NASDAQ: JD), Richard Liu, has been a major seller in recent months. Exchange filings show the billionaire has just offloaded around US$930 million worth of JD.com shares.
Liu stepped down as CEO of the company in April this year and has been at the centre of a rape controversy in the United States, where a university student is pursuing civil action against him.
Even after the recent sales totalling close to a billion dollars, Liu still owns a controlling stake in JD.com.
Over the past year, JD.com stock has risen around 15%.
Prosus NV – Tencent Holdings
Prosus NV is Tencent Holdings’ (HKG: 0700) largest shareholder, with a 29% stake in the company worth around US$134 billion.
But that stake will soon shrink.
On Monday, the Amsterdam-listed global investment giant announced it would be selling some of its Tencent shares in an “orderly, on market sale”. The proceeds of the sale will be used to fund a buyback of its own stock and stock in its parent, South Africa-headquartered, Naspers.
In not clear just how many Tencent shares Prosus will sell in the coming weeks, but it comes as Tencent’s stock price has risen by more than 20% since reaching a 52-week low in March.
The question is why Tencent? Prosus could have sold down stakes in any of its 85 portfolio holdings, which you can see here.
Wang Xing – Meituan
This is perhaps one of the more noble insider sales.
Wang Xing is the Billionaire Founder and CEO of Meituan (HKG: 3690) – often referred to as the Uber of China.
This month, Wang Xing announced he’s sold around US$2.3 billion worth of shares. But according to the company, the proceeds aren’t going into Xing’s bank account, instead, the 42 year old is transferring the shares to his philanthropic foundation.
“This decision does not reflect any changes in his dedication to Meituan’s business. The foundation to which the shares were donated will dedicate the funds to education industry and scientific research.” said the company in a statement.
UBS & JP Morgan – Ping An Insurance Group
Investment bank, UBS, has been a seller of shares in Chinese insurance giant, Ping An Insurance Group (HKG: 2318).
UBS recently sold over HK$605 million worth of Ping An stock at around $46 per share.
This followed a series of sales by rival investment bank, JP Morgan, which sold over HK$5.5 billion worth of Ping An stock in April.
JP Morgan remains a top-5 shareholder of Ping An.
The selling by the investment banks could be a sign institutional investors are becoming fatigued by the dismal performance of Ping An. The company’s share price been hit hard during the Chinese stocks sell off, down almost 50% since highs in March 2021.