Star shareholders push Zhejiang Orient's stock surging

Zhejiang Orient Holdings is an ordinary company listed on the A-share market. But its stocks have recently surged for three consecutive days, thanks to a pair of celebrity names on the company's share holding list.

Zhejiang Orient's stocks soared to the 10 percent limit for consecutive days after the names of movie stars Deng Jie and Xu Fan were revealed among the companies top 10 shareholders.

The company - which focuses mainly on its clothing business - disclosed its third quarter report last Saturday. The report showed Xu Fan and Deng Jie are the third and fourth-largest share holders respectively.

On Wednesday, the company announced it would buy equities from a bankrupt trust company. The news spurred Zhejiang Orient's stocks to climb even further. But analysts point out the case is still in its preliminary stage and investors should be wary of the risks.

Zhang Gang, Analyst of Southwest Securities said "It's clear that the market has high expectations. But whether Zhejiang Orient could buy the trust company remains unclear. It is also unknown whether the assets could bring new profit to Zhejiang Orient. There are risks after the stocks surged too dramatically."

Reports say Deng Jie and Xu Fan bought Zhejiang Orient's stocks because the company may restructure.

But Zhejiang Orient has downplayed suggestions it was preparing to restructure. Moreover, it's still not certain whether the names Deng Jie and Xu Fan on the shareholders' list really belong to the movie stars.

Huang Xiangbin, Senior Researcher of Cinda Securities said "It's just a rumor currently. It's only ruled that senior executives of listed companies, the securities watchdog, and employees in financial sectors are not allowed to buy stocks. Movie stars are not prohibited. We cannot say that they involved in inside trading without authentic evidence."

Zhejiang Orient's stock price has hit its record high, but experts caution investors to avoid being swept up by possible star-studded shareholders.