Broker reports may have hit share price, says China Sunsine

China Sunsine Chemical Holdings said yesterday that it is unaware of any information not previously announced that could have caused the wide fluctuations in its share price over the last week.

Shares of the Chinese speciality rubber chemicals manufacturer have dived 22.8 per cent since it reported second-quarter earnings on Aug 7, closing at $1.15 on Tuesday. Short-selling volume jumped over that period, ranging from 7.3 to 15.8 per cent of all trades each day.

The group said "various reports issued by some stockbroking firms" might have impacted its share price, though it did not name any specific reports.

On Aug 7, CGS-CIMB downgraded China Sunsine from "add" to "hold", reducing its target price from $1.87 to $1.41, based on a forward 2019 price-to-earnings ratio of 7.7 times instead of 9.8 times previously.

Analyst Colin Tan said the "good times may be over" after a 43 per cent share price rally since January. He said: "Normalising average selling prices could hit profit margins going forward."

China Sunsine said yesterday: "Our group is operating normally, and we remain positive of our performance in the next 12 months. The board also remains committed to implementing our dividend policy as announced on June 12, 2017 for the 2018 financial year."

Its shares yesterday rebounded six cents or 5.2 per cent to close at $1.21.

A version of this article appeared in the print edition of The Straits Times on August 16, 2018, with the headline 'Broker reports may have hit share price, says China Sunsine'. Print Edition | Subscribe