Wing Lun Cheung Bought 32% More Shares In Hengdeli Holdings

Hengdeli Holdings Limited (HKG:3389) shareholders (or potential shareholders) will be happy to see that the CEO & Executive Chairman, Wing Lun Cheung, recently bought a whopping HK$61m worth of stock, at a price of HK$0.14. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 32%.

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The Last 12 Months Of Insider Transactions At Hengdeli Holdings

Over the last year, we can see that the biggest insider purchase was by insider Ka Kiu Fung for HK$66m worth of shares, at about HK$0.10 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.14. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Hengdeli Holdings insiders were buying shares, but not selling. They paid about HK$0.12 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Hengdeli Holdings

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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. Hengdeli Holdings insiders own 49% of the company, currently worth about HK$302m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Hengdeli Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Hengdeli Holdings. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Hengdeli Holdings that deserve your attention before buying any shares.

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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.