Tingyi Holding Corp (頂益控股), a Taiwanese-funded food company based in China's northern city of Tianjin, was censured by Hong Kong's stock exchange for selective disclosure of earnings information to an analyst on two occasions.
The unpublished information was "price sensitive" and "placed the analysts in a privileged dealing position," the exchange, a unit of publicly traded Hong Kong Exchanges and Clearing Ltd, said in a statement yesterday. The exchange didn't identify the analysts or their brokerages.
A message seeking comment left at the Hong Kong office of Tingyi, China's biggest packaged-food maker by sales, wasn't returned. The stock in Hong Kong fell 1.1 percent to HK$1.74 at the midday close. A censure carries no other punishment from the stock exchange beyond the statement.
"If Hong Kong wants to keep its financial position in the world, it should have something a little bit more serious than just a critical statement," said Kitty Chan (陳蓓敏), a director at Rexcapital Asset Management Ltd (御泰資產管理) in Hong Kong.
Tingyi on July 11, 2000, disclosed to an analyst unaudited financial information spanning five months, the exchange said. On March 29, 2001, the company disclosed to another analyst unaudited financial information spanning 11 months, the statement said.
Based on the information, one analyst published research reports on July 17 and on July 25 in 2000, the exchange said.
Tingyi's average share price increased about 16 percent from July 14 to July 18 and again from July 24 to July 26, the statement said.
The other analyst prepared a report on March 30, 2001, and the company's average share price rose about 3 percent from March 29 to March 30, 2001, the statement said. The trading volume on March 30 was 280 percent of Tingyi's daily average for the period of March 1 to 29, it said.
Tingyi had a net income of US$17.2 million for the first half of 2000, compared with a net loss of US$24 million a year ago, according to Bloomberg data. For the full year of 2000, profit was US$40.1 million, compared with a loss of US$35.9 million in 1999.