FAST NEWS: Morgan Stanley cuts stake in Tongdao Leipin

The latest: U.S. banking giant Morgan Stanley disclosed it sold about 228,000 shares of Tongdao Leipin Group (2013.HK) on Dec. 11, lowering its stake from 5.02% to 4.97%, according to a new Hong Kong Stock Exchange filing.

Looking up: The sale dropped Morgan Stanley’s Tongdao Leipin stake below the 5% threshold that requires disclosure of any changes in its holdings, thus it won’t need to report any further reductions to the Hong Kong Stock Exchange.

Take Note: Such stake reductions by an institutional investor are generally considered a negative signal, possibly showing a lack of optimism on the company’s prospects.

Digging Deeper: Founded in Beijing in 2011 and listed in Hong Kong in 2018, Tongdao Liepin provides a wide range of free and paid talent acquisition services to individuals and companies through its liepin.com website, mobile app and WeChat platform. The company’s revenue dropped by a slight 0.5% year-over-year in 2022, ending years of rapid growth, as China’s strict Covid control measures led many employers to lay off workers and slow their new hiring. The company’s revenue plunged 20.3% in the first half of the year amid weak recruitment activity as China’s economy slowed.

Market Reaction: Tongdao Liepin’s shares rose on Friday, closing up 2.2% HK$5.60. The stock now trades near the lower end of its 52-week range.

Translation by A. Au

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