Redwall(SZ:002809) Di Yi Cai Jing·2025-05-12 13:41Core Viewpoint - The stock price of Hongqiang Co., Ltd. has surged significantly despite deteriorating fundamentals, with major shareholders, including the second-largest shareholder Guangdong Kechuang, executing share reductions during this period [2][5][6]. Stock Performance - Hongqiang's stock price increased from a low of 6.62 yuan per share on April 9 to a high of 15.15 yuan per share on May 12, achieving a more than 100% increase over this period [3][4]. - The company experienced 9 trading days of price limits within 15 trading days, leading to a price-to-earnings ratio of 83.27, significantly higher than the industry average of 19.92 [2][3]. Financial Performance - The company's net profit attributable to shareholders has declined from 113 million yuan in 2021 to 48.76 million yuan in 2024, with a more than 80% year-on-year drop in the first quarter of 2025 [2][3][6]. - In 2024, Hongqiang reported total revenue of 675 million yuan, a decrease of 11.23% year-on-year, and a net profit decline of 42.98% [6][7]. Shareholder Actions - Guangdong Kechuang reduced its stake by 1% at an average price of 10.64 yuan per share, realizing approximately 22.37 million yuan in cash [5][6]. - Other executives also executed share reductions, with Vice President He Yuanjie and shareholder Han Qiang reducing their stakes at prices above 9.85 yuan per share [5][6]. Market Dynamics - The stock price surge has been characterized by speculative trading, with institutional investors and retail investors participating in a relay-style trading pattern [2][8]. - Initial buying was led by institutional and retail investors, followed by a shift to retail investors, particularly the "Lhasa team" [9]. Dividend Policy - Despite declining performance, Hongqiang announced a substantial dividend of 3 yuan per 10 shares for 2024, totaling 63.07 million yuan, exceeding the net profit for the year [6][7].