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Shares in China’s second-largest property developer were down in early trade on Thursday amid speculation the company is at risk of breaching limits on how many shares it can reacquire through buybacks.

Hong Kong-listed China Evergrande bought back 46.2m shares for HK$410m ($52.7m) on Wednesday, according to a filing to the Hong Kong Stock Exchange. The company has bought back about 5 per cent of its stock in the past four weeks, while seeing its share price rise by 40 per cent to a record high on Tuesday.

Evergrande shares were down 4 per cent on Thursday, having closed 6 per cent lower in the previous session as analysts speculated the company’s buybacks have brought its free float close to Hong Kong’s limit.

The company’s founder and chairman, Hui Ka Yan, controls 73.8 per cent of the its shares, according to S&P Capital IQ. Evergrande’s own buybacks have shrunk its total free float to just over 22 per cent — its floor, according to analysts.

Hong Kong’s free float minimum is usually 25 per cent, but that can in some cases be waived. The Hong Kong exchange declined to say what Evergrande’s limit is.

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