(Yicai Global) Oct. 23 -- Jinzi Ham's stock price slumped today after the Shenzhen Stock Exchange again questioned why the Chinese meatpacker's senior executives announced plans to sell shares just days after the company unveiled pre-sales of a synthetic meat.

Shares [SHE:002515] in the Jinhua, Zhejiang province-based company fell 9.2 percent to end at CNY6.40 (90 US cents) each.

The SSE wrote to Jinzi Ham today asking it to re-explain why it disclosed pre-sales of its meat substitute on social media and whether there was any intention to boost the stock before executives sold about 5 percent of shares outstanding in the firm. Jinzi Ham gained by the 10 percent daily limit five times in the nine trading days following the announcement.

Listed artificial meat producers such as Yantai Shuangta Food and Harbin High-Tech Group have garnered much investor interest this year, sending their stock prices soaring, after African swine fever outbreaks curtailed pork supply in China.

Jinzi said yesterday that controlling shareholder Shi Yanjun and two other parties would sell 48.9 million shares, while Director Wang Qihui and Xia Fanlin, board supervisor, would dispose of 769,000 and 410,000 shares. Each said the divestments were for personal financial reasons.
Listed artificial meat producers such as Yantai Shuangta Food and Harbin High-Tech Group have garnered much investor interest this year, sending their stock prices soaring, after African swine fever outbreaks curtailed pork supply in China.

Jinzi said yesterday that controlling shareholder Shi Yanjun and two other parties would sell 48.9 million shares, while Director Wang Qihui and Xia Fanlin, board supervisor, would dispose of 769,000 and 410,000 shares. Each said the divestments were for personal financial reasons.
This is the second letter of concern the bourse has sent to Jinzi Ham in less than 10 days. It dispatched the first on Oct. 15, asking why the company did not reveal that it had begun pre-selling the product when answering investor questions online, and whether its announcement was timely.

Jinzi said in a stock exchange filing on Oct. 10 that it had co-developed a synthetic meat in tandem with US chemical giant DuPont and had a production license. On Oct. 14, it said it had begun pre-sales on e-commerce site Tmall. The firm claimed that it began pre-sales on Oct. 7 and had received just 12 orders from three people by Oct. 10, so there should have been no need to disclose it as a major event.

The product is a faux-beef patty made from soy protein that uses no genetically modified organisms. A pack of four burgers costs CNY118 (USD16.66) and Jinzi has earned CNY200,000 (USD28,200) from sales so far, or less than 0.05 percent of its 2018 revenue.

Jinzi Ham more than tripled its net profit over the first three quarters to CNY47.5 million (USD6.7 million), according to its latest financial report, while revenue nearly halved to CNY168 million.