Ever-Glory International Group, Inc. (NASDAQ: EVK) is a China-based fashion retailer and supply chain solutions provider. Shares of the Chinese apparel company are skyrocketing 159% through early trading on Monday, August 2, 2021. Over the past three months, Ever-Glory has seen average daily volume of 582,880 shares. However, volume of 62.82 million shares or dollar volume of $330.43 million, has already exchanged hands through early trading on August 2nd.
Shares of Ever-Glory are soaring after the company announced that its Board of Directors has authorized a $5 million common share repurchase program, which is valid through December 31, 2021. Management notes that Ever-Glory may choose to repurchase common shares through various means, including open market and private transactions. All share repurchases will follow U.S. securities laws laid out in the Securities Exchange Act of 1934.
“We believe our stock is a good value, and the Board’s approval of this stock repurchase program is recognition of the long-term prospects in our Company’s intrinsic value and the undervalued price of our stock,” said Mr. Yihua Kang, Chairman, President, and Chief Executive Officer of Ever-Glory. “Repurchasing stock underscores our commitment to enhancing shareholder value and demonstrates confidence in our business.”
The news from Ever-Glory comes amid renewed scrutiny of U.S.-listed Chinese companies, after a regulatory crackdown in Beijing sent shares crumbling. In July 2021 alone, Chinese stocks listed on U.S. exchanges saw $400 billion of value disappear. However, Beijing has begun to soften its tone and show signs of support, lifting Chinese and global equity markets.
In light of July’s activities, the U.S. Securities and Exchange Commission (SEC) have implemented new rules that will require more disclosures from Chinese companies seeking to go public on U.S. exchanges. Specifically, the SEC will require Chinese companies to accurate disclose regulatory risks and other financial information, in an effort to increase transparency.
SEC Chairman Gary Gensler noted: “In light of the recent developments in China…I have asked staff to seek certain disclosures from offshore issuers associated with China based operating companies before their registration statements will be declared effective. I believe these changes will enhance the overall quality of disclosure in registration statements of offshore issuers that have affiliations with China-based operating companies.”
Disclosure: Neither Matt Rego nor Spotlight Growth have any position or relationship with any companies mentioned in this article. No payment was made to create this article. This article should not be taken as a solicitation or recommendation to buy or sell any securities. Please conduct your own research and consult your financial advisor to determine your risk tolerance and investment path. We are not licensed brokers or investment advisors.