Moutai Executive May Have Preempted Share Slide With Cash-Out
Li Jun
/SOURCE : Yicai
Moutai Executive May Have Preempted Share Slide With Cash-Out

(Yicai Global) Nov. 7 -- Woes continued for investors in Kweichow Moutai this week as stocks slid though there was at least one indicator that trouble had been brewing at the world's largest liquor maker after an executive cashed-out shares a month before the release of disappointing financial results.

Stocks in the Guizhou-based firm [SHA:600519] closed at a 14-month low last week following disappointing financials. After a few days of corrections, they continued to fall on the first two days of this week.

Stocks closed down 1.39 percent yesterday at CNY566 (USD81.7), having fallen 2.9 percent to CNY575 the day before. Moutai shares hit the maximum 10 percent daily decline allowed in the country's A-share market for the first time ever on Oct. 29, wiping billions off the firm's market capitalization.

Keen investors would have read the early warning signs of the slide, had they taken note of recent moves by a top manager to cash out shares.

Moutai Deputy General Manager Wan Bo cashed out 700 shares on Sept. 26 through a centralized bidding process, according to a company statement, which cited personal reasons as Wan's motivation. The amount raised was higher than the executive's post-tax annual income at more than CNY500,000. He previously confirmed plans to sell the shares between September and March 2019.

Wan's deal was also very timely as it took place just outside of the standard 30-day period of transaction restrictions in the run-up to the release of a financial report, which came out on Oct. 28.

Formerly a quality director at the firm, Wan has been in his current position since February 2014. He acquired the 700 shares through secondary market trading, according to Moutai's 2017 report.

Company shares closed up 0.07 percent at CNY566.4 in today's trade.

Editor: William Clegg

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Keywords: MSCI , Vice General Manager , Reduction Share