Chairman & Compliance Officer of Changmao Biochemical Engineering Xin Sheng Rui Buys 21% More Shares

Even if it's not a huge purchase, we think it was good to see that Xin Sheng Rui, the Chairman & Compliance Officer of Changmao Biochemical Engineering Company Limited (HKG:954) recently shelled out HK$572k to buy stock, at HK$0.38 per share. That purchase might not be huge but it did increase their holding by 21%.

Check out our latest analysis for Changmao Biochemical Engineering

Changmao Biochemical Engineering Insider Transactions Over The Last Year

In fact, the recent purchase by Xin Sheng Rui was the biggest purchase of Changmao Biochemical Engineering shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is HK$0.40. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Changmao Biochemical Engineering share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Xin Sheng Rui.

Xin Sheng Rui bought 5.42m shares over the last 12 months at an average price of HK$0.48. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does Changmao Biochemical Engineering Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Changmao Biochemical Engineering insiders own 14% of the company, worth about HK$30m. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Changmao Biochemical Engineering Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Changmao Biochemical Engineering we think they are probably pretty confident of a bright future. 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. To help with this, we've discovered 3 warning signs (2 are potentially serious!) that you ought to be aware of before buying any shares in Changmao Biochemical Engineering.

Of course Changmao Biochemical Engineering may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.