The abnormal price movement of stocks prior to the release of major news often attracts special attention from the market. Recently, such phenomena have been occurring frequently.

Tonight, China Electric Motor (603988.SH) announced that its controlling shareholder and actual controller intend to change. This major event was first disclosed after the market closed on July 23, but the company's share price had already hit the upper limit during the trading hours of the same day.

Similarly, the process of 'National Fruit Juice' Huiyuan returning to A shares seems to have been anticipated by funds as well. Prior to the announcement by 'Pengxin series' listed company Interchina Water Treatment (600187.SH) that it plans to officially take control of Huiyuan, the company's stock had already risen by limit-down volume against the market.

Moreover, Caixin reporters have also noticed that China Zhong Fu Tong Group (300560.SZ), Harson Trading(China)Co. (603958.SH), Jiangsu Changbao Steel Tube (002478.SZ), among others, have seen a significant increase in stock prices even prior to the official release of sensitive news, even rising by limit-up volume. This kind of 'sprint' with a significant suspicion of insider trading has been occurring amid a continuous decline of stock indices in recent times.

The 'sprint' before major events

Today, China Electric Motor's major shareholder had officially reached an agreement for the transfer of controlling rights, with Beijing Gaodi Resources Development Co., Ltd. acquiring a total of 70.56 million shares in the listed company (30% of the total number of shares) to obtain the controlling rights of the listed company. The company's stock will resume trading from July 26.

It is worth noting that the announcement of the controlling shareholder's plan for the transfer of controlling rights was made after the market closed on July 23. The company stated in the announcement that the controlling shareholder Ningbo Junto and the major shareholder Wang Jianyu and Wang Jiankai are planning the transfer of shares of the company, which may result in a change in the controlling rights of the company.

On July 23, within the first 15 minutes of trading, China Electric Motor had risen continuously, then went limit-up quickly. The amount of limit-up orders was very large, indicating that the main force had a strong buying intention. The company's stock closed at 8.23 yuan/share that day, with a turnover rate of 2.19% for the day and a turnover of 41.39 million yuan.

In recent years, China Electric Motor's operating performance has been poor. In 2020, the company achieved a net income of 0.171 billion yuan, and by 2023, the net income will only be 43.207 million yuan. On July 11, the performance forecast released by China Electric Motor showed that the company expected to incur a net loss of 21.6 million yuan in the first half of this year. This is also the first time China Electric Motor has reported a semi-annual loss since its listing in 2014.

An example of stock price hitting limit-up volume before the release of bullish news also occurred in Interchina Water Treatment's acquisition of well-known brand Huiyuan Fruit Juice.

Public information shows that Beijing Huiyuan was founded in the 1990s and was once known as the "Fruit Juice King" of China. However, with various adverse factors such as changes in the economic environment, industry environment and credit environment, Beijing Huiyuan experienced liquidity problems and was once faced with serious debt crises. The company was eventually ruled to enter the reorganization procedure by the court, and it was approved by the court in June 2022.

Interchina Water Treatment announced on the night of July 22 that it planned to acquire Zhujie Wenshenghui, held by Shanghai Yongrui in cash, with a registration capital of no less than 0.232 billion yuan. After the acquisition is completed, the company will cumulatively hold a registered capital of Wenshenghui of no less than 0.816 billion yuan, accounting for no less than 51% of the company's registered capital, thereby indirectly controlling Beijing Huiyuan.

However, even before Interchina Water Treatment announced that it plans to control Beijing Huiyuan, the company's stock had already risen by limit-up volume against the market.

On July 22, after a minor shock, the stock price of Interchina Water Treatment ushered in waves of rise under the push of a large number of buying orders. In the afternoon, the stock price of Interchina Water Treatment was locked by the limit-up volume. At the end of the day, Interchina Water Treatment closed at 1.71 yuan, up 10.32%, with a turnover of 0.195 billion yuan.

In contrast, on July 22, the Shanghai and Shenzhen Stock Exchanges fell across the board, with a 13.2 billion yuan decrease in trading volume compared to the previous trading day. Since then, Interchina Water Treatment has continued to rise by limit-up volume on July 23, 24, 25.

Fund analyst Tao Ze told Caisheng Society reporters that when the market and related sectors did not have a significant increase, it was difficult to understand why the stock prices of companies such as Guozhong Water and Sec Electric Machinery fluctuated significantly. "Facing such stock price fluctuations, it is difficult to find other reasonable explanations except to suspect that some funds have gained advance access to undisclosed information and carried out 'front-running' operations."

Frequent pre-bullish movements have recently appeared.

Similar to Sec Electric Machinery and Guozhong Water, Zhong Fu Tong also saw significant fluctuations in its stock price before announcing its strategic cooperation agreement with Xiamen Dragon.

On the evening of July 22nd, Zhong Fu Tong announced that it had signed a strategic cooperation agreement with Xiamen Jinlong United Automotive Industry Co., Ltd., and the two parties will jointly explore the application of autonomous driving technology in multiple scenarios based on efficient collaboration based on cars, roads, networks, clouds, maps, and other technologies. This partnership is undoubtedly a bullish move for Zhong Fu Tong.

However, before the announcement was made, Zhong Fu Tong stock had already risen in advance. On July 19th, the stock rose 4.55% after declining for some time, and continued to rise 5.47% on the 22nd.

In addition, traditional shoe company Harson Trading (China) Co., Ltd. has been planning to acquire "Fruit Chain" for half a year. On the evening of July 16th, Harson Trading announced that the company plans to adjust the major asset restructuring plan, and the relevant indicators expected to be adjusted account for more than 20% of the total corresponding indicators. At the same time, the company's stock has been suspended from trading since the 17th of July.

Before this announcement was made, Harson's stock price had already experienced some movement, gaining two consecutive limit-up increases on July 15th and 16th, and closing at 9.35 yuan per share before the suspension.

Share buybacks are often seen as a measure to stabilize prices, but some companies have not yet officially announced their share buyback plans and are already suspected of providing some investors with early access to certain information.

On the evening of July 24th, Changbao Steel Tube announced that the company plans to use its own funds of no less than 30 million yuan and no more than 60 million yuan to repurchase company shares through centralized bidding trading. The repurchase price will not exceed RMB 6.50 per share, and the repurchase period will not exceed 12 months from the date on which the board of directors approves the repurchase plan.

On July 24th, before the announcement was made, Changbao's stock strangely traded with high volume and rose 6.36% to close at 5.02 yuan per share with a turnover of 109 million yuan, while the stock had only traded 23.43 million yuan the previous trading day.

Are the concentrated transactions of speculative funds just a coincidence?

Caisheng Society reporters noticed that before these bullish news was released, speculative funds had already positioned themselves.

Among them, Guozhong Water's post-market data on July 22nd showed that Guangzhou Jiangnan Dadao Middle Road Securities Business Department under Guoyuan Securities had a net buy amount of up to 23.5328 million yuan, accounting for 12% of the total transaction ratio.

Guo Zhongshuiwu belongs to Pengxin Group's investment portfolio. In recent years, Pengxin Group's leader Jiang Zhaobo has been active in the capital market, successively bringing Pengxin International Mining (600490.SH), Guo Zhongshuiwu, Pengdu Agriculture & Animal Husbandry (002505.SZ) and Everchina International Holdings (00202.HK) into its fold.

The latest data from the Guangzhou Jiangnan Dadao Middle Road Business Department of Guoyuan Securities suggests that the company often carries out transactions with "Pengxin Group" companies. For example, the department bought 17.0731 million yuan worth of Pengdu Agriculture & Animal Husbandry on May 24th and sold 68.5444 million yuan worth of it on June 20th.

Is this kind of highly concentrated trading behavior by the "Peng Xin Group" really just a coincidence? In response, Tao Ze analyzed to Caisheng Society reporters that relevant transactions clearly deviated from normal market transactions and made people suspect whether there was any relationship or benefit distribution involved.

In the stock bar, many investors strongly question the pre-bullish movements in the stock market, with doubts such as "leaked information" and "rat warehouse" being heard.

Li Jian, deputy director of Zhejiang Yufeng Law Firm, told Caisheng Society reporters that the harm of insider trading is mainly twofold. Firstly, it violates the basic principle of "openness, fairness, and impartiality" of the securities market and seriously disrupts the order of the securities market. Secondly, it may seek illegal benefits through insider trading behavior, which may affect the normal stock prices and cause losses to other investors.

Furthermore, Li Jian pointed out that insider trading has the characteristics of concealment and complexity, making evidence collection somewhat difficult. However, with the advancement of technology and the improvement of regulatory measures, monitoring of insider trading has gradually strengthened. "Once the fact of insider trading is established, the parties responsible may face administrative penalties. In addition, violators may also face civil compensation lawsuits filed by investors who have suffered losses due to insider trading."

Cailian Press has noticed that recently the regulation has been strengthening its crackdown on insider trading, and major shareholders or executives of Ganfeng Lithium (002460.SZ) and other companies have successively received administrative penalty decisions from the China Securities Regulatory Commission (CSRC) for their involvement in insider trading cases.