Among the key news on Hong Kong stocks, Ganfeng Lithium Co. (HK:1772) was fined by China’s securities regulator, CSRC (China Securities Regulatory Commission), for insider trading activities related to Jiangxi Special Electric Motor in 2020. Ganfeng was informed of the fines back in December 2022, but the final regulatory fines were announced last week.
Ganfeng shares dropped nearly 4% in today’s trading session. Year-to-date, the company’s shares have fallen by over 46%.
Ganfeng Lithium is among the leading producers of lithium in China and worldwide.
Ganfeng Lithium’s Fine Details
As per the latest decision, the Jiangxi Regulatory Bureau of the China Securities Regulatory Commission decided to seize ¥1.1053 million of Ganfeng Lithium’s illegal proceeds and impose a fine of ¥3.32 million. Additionally, Chairman Li Liangbin received a warning and will have to pay a fine of ¥0.6 million, while the former board secretary, Ouyang Ming, was warned and fined ¥0.2 million.
Ganfeng Lithium’s Insider Trading Case Backdrop
In December 2022, CSRC discovered in its investigation that Ganfeng had purchased shares of China-based Jiangxi Special Electric Motor between late June and early July 2020 at an average price of ¥1.68 each. The company then sold the shares on July 8 and 9, earning approximately ¥1.11 million.
During this period, Ganfeng Lithium was also negotiating a potential acquisition deal with Jiangxi Special Electric Motor. Later on, the acquisition talks were terminated due to disagreements on the terms between both companies.
Is Ganfeng a Good Stock to Buy?
On TipRanks, 1772 stock has been assigned a Hold rating based on two Buys, one Hold, and one Sell recommendation from analysts. The Ganfeng Lithium share price target is HK$24.93, which is 55.2% above the current trading level.
