China’s economy continues to struggle. On September 24, the Chinese authorities announced a series of monetary stimuli and measures to rescue the real estate market, resulting in a rise in the continuously declining stock market. However, many major shareholders and executives seized the opportunity to reduce their holdings.
According to the China Financial Technology Information Service Platform “Titan Media” report on September 29, with the implementation of a series of policies, incremental funds rushed to enter the market, leading to a strong rebound in the A-share market.
At the same time, many listed companies disclosed reduction notices. According to incomplete statistics, since September 25, more than 50 listed companies have disclosed reduction plans involving controlling shareholders, actual controllers, shareholders with more than 5% holdings, and company executives. Some major shareholders also completed their reduction plans during the period of surging stock prices.
A screenshot uploaded indicated that most of the 50 companies announcing reductions had announcement dates from the 28th onwards.
According to a report by “Economic Observer” on September 28, incomplete statistics showed that more than 40 listed companies have announced reduction plans in the five days since September 24. These reduction plans mainly involve major shareholders, controlling shareholders, actual controllers, and concerted actors, with the reason for reductions often cited as personal fund needs.
However, according to financial practitioners and self-media personality “Peng Brother Investment Research,” in a post on September 25, within two days from the 24th to the 25th, 50 companies joined the reduction ranks. Moreover, five companies had their actual controllers leading the way, and some companies even sold stocks against their promise not to reduce holdings.
“Peng Brother Investment Research” mentioned that the stock price of “Qianhe Flavor Industry” has been declining for four years, dropping more than 60% from its peak, with major shareholders and executives reducing holdings. “Baodi Mining,” listed in 2023, saw its stock price plummet to a historic low after listing, with shareholders breaching commitments and intending to sell shares. The stock price of “Xinda Co., Ltd.” fell from 13 yuan to 3 yuan, with a core shareholder recently “dumping” 11.44 million shares, pushing the stock price to a “historic low.” The stock of “Zhuolang Intelligent” has dropped over 93% from its peak, prompting the controlling shareholder to sell 17.34 million shares this time.
“Peng Brother Investment Research” pointed out that the wave of reductions tonight (25th) is like a “flood beast,” with major shareholders of Tongda Hai reducing holdings of over 1% of shares, while the equity incentives of Zhejiang Longsheng have turned into a “mirage,” and the executives of Jufei Optoelectronics are eager to “secure the bag.”
Companies such as Founder Technology, Guoguang Group, Weiye Co., Ltd., China Iron, Xiaosong Co., Ltd., and Junyao Health seem to be taking advantage of the situation, trying to “sell off” stocks when the market is rising.
“Deep Blue Finance” stated that reductions are commonplace, and shareholders cashing out when stocks surge is understandable. However, as A-shares have only risen for just 4 days, it is natural to suspect that these companies have been waiting for this opportunity to reduce holdings and cash out.