Executive Chairman of Zhonghua Gas Holdings Yishi Hu Buys 18% More Shares

Those following along with Zhonghua Gas Holdings Limited (HKG:8246) will no doubt be intrigued by the recent purchase of shares by Yishi Hu, Executive Chairman of the company, who spent a stonking HK$14m on stock at an average price of HK$0.098. Not only is that a big swing, but it increased their holding size by 18%, which is definitely great to see.

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Zhonghua Gas Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Executive Chairman Yishi Hu was not their only acquisition of Zhonghua Gas Holdings shares this year. They previously made an even bigger purchase of HK$27m worth of shares at a price of HK$0.12 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.083). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Yishi Hu was the only individual insider to buy shares in the last twelve months.

Yishi Hu purchased 600.00m shares over the year. The average price per share was HK$0.11. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Zhonghua Gas Holdings

Zhonghua Gas Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Zhonghua Gas Holdings insiders own about HK$164m worth of shares (which is 43% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Zhonghua Gas Holdings Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Zhonghua Gas Holdings insiders are well aligned, and quite possibly think the share price is too low. Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for Zhonghua Gas Holdings (2 don't sit too well with us!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.