Hong Kong billionaire Henry Cheng’s family increased its stake in property developer New World Development this week, according to a person familiar with the matter, as the company’s shares reached a 20-year low.

The family purchased shares on Tuesday and Wednesday (Dec 6) through Chow Tai Fook Capital, the person said, asking not to be identified because the information isn’t public. Hong Kong Economic Journal reported the transaction earlier. 

Shares of New World rose as much as 3.3 per cent on Thursday (Dec 7) before erasing the gains to trade 2 per cent lower. The stock has dropped about 50 per cent this year.

New World’s high debt level has raised concerns among investors and analysts as borrowing costs climb. The company earlier this year sold a stake in its NWS Holdings subsidiary to the family’s investment holding company to pay down debt.

“It makes sense for the family to buy shares to show its support,” said Patrick Wong, a Bloomberg Intelligence analyst, noting that the stock is trading at just 0.14 times the book value of its assets. 

Gearing and a lower proportion of stable earnings after selling the unit will weigh on New World’s share price, Goldman Sachs Group analysts including Gurpreet Singh Sahi wrote in a note this week. 

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Chow Tai Fook Capital held about a 45.24 per cent stake in the property developer as of June 30, New World’s annual report shows.

New World’s net debt to equity was 94 per cent at the end of June, according to Bloomberg Intelligence. That compares with 42 per cent at peer Henderson Land Development and Sun Hung Kai Properties’ 18 per cent.

Chow Tai Fook Jewellery Group, also controlled by the family, had repurchased nearly 8 million shares for about HK$87 million ($11 million) between Nov 28 and Dec 5. BLOOMBERG