The latest: Container truck manufacturer CIMC Vehicles (Group) Co. Ltd. (1839.HK; 301039.SZ) announced on Thursday its controlling shareholder purchased 27.05 million of its shares in the open market between Dec. 20 and Jan. 19, paying an average price of HK$5.20 per share.

Looking up: The purchases raised the controlling shareholder’s stake in CIMC Vehicles from 55.44% to 56.78%, further consolidating its control.

Take Note: CIMC Vehicles’ closing price of HK$4.94 on Thursday is 5% below the controlling shareholder’s average purchase price of HK$5.20.

Digging Deeper: CIMC Vehicles designs, manufactures and sells a wide range of semi-trailers to customers in China, North America and Europe. Despite widespread disruptions caused by the global pandemic starting in 2020, China’s quick control of its local outbreaks minimized disruptions to its logistics industry in the pandemic’s first two years. That allowed CIMC Vehicles to post record revenues for two consecutive years. But that changed last year, as China’s strict measures to control the highly contagious Omicron variant, combined with deteriorating trade conditions due to the conflict in Ukraine, created challenges for the semi-trailer industry. As a result, the company’s revenue and net profit for the first three quarters of last year decreased by 22.9% and 16%, respectively.

Market Reaction: CIMC Vehicles’ Hong Kong-listed shares rose on Friday, closing up 3.2% at HK$5.10 by the midday break. The stock now trades in the middle of its 52-week range.

Translation by Jony Ho

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