The latest: The Capital Group Companies, Inc., a U.S.-based fund disclosed it purchased 1.285 million shares in Hutchmed (China) Ltd. (HCM.US; 0013.HK) for HK$22.14 million ($2.84 million), raising its stake from 8.93% to 9.08%, according to a Hong Kong Stock Exchange filing.
Looking up: Although Hutchmed’s U.S.-listed shares are at risk of delisting, its Hong Kong shares are still being purchased by a U.S.-based fund, reflecting this shareholder’s confidence in the company’s prospects.
Take Note: The average price per share for The Capital Group’s increased stake in Hutchmed is HK$17.236. Based on the stock’s closing price of HK$15.7 on Tuesday, this means the shareholder has recorded a 9% book loss.
Digging Deeper: Founded in 2000, Hutchmed is a biopharmaceutical company owned by Hong Kong billionaire Li Ka-shing. It is in the commercialization stage of developing innovative cancer drugs. The company has undergone some changes this year, with the retirement of its CEO of 22 years, Christian Hogg, in March, and it was placed on a conclusive list of companies that could face the threat of delisting under the Foreign Company Accountability Act by the U.S. Securities and Exchange Commission (SEC). The company responded that it would continue to evaluate all options for maintaining its U.S. listing, including the appointment of an auditor outside of China and how it can meet the requirements of the Act.
Market Reaction: Hutchmed’s Hong Kong shares opened 2.3% higher on Wednesday morning, but the gains later slightly narrowed to 1.9% and closed at HK$16 at the midday break. It now trades at the lower end of its 52-week range.
Translation by Jony Ho
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