HON-Flex(SZ:300657) Tai Mei Ti A P P·2025-05-19 00:38Core Viewpoint - The stock price of Hongxin Electronics (300657.SZ) experienced a dramatic decline from its historical high of 47.61 yuan, dropping nearly 50% within 18 trading days, reminiscent of previous market manipulations known as "killing pigs" [2][3] Group 1: Stock Performance and Market Sentiment - The stock's rise and fall in 2023 mirrored past patterns, with significant price fluctuations driven by speculative trading and social media hype [3][5] - On April 7, the stock plummeted by 20%, leading to investor losses of up to 22% in a single day, following negative rumors about the company's shareholder meeting [6][9] - The stock's volatility was exacerbated by social media influencers promoting the stock, which led to a rapid sell-off by institutional investors [6][9] Group 2: Business Operations and Financial Performance - Hongxin Electronics' main business, flexible printed circuit boards (FPC), generated 3.097 billion yuan in revenue for 2024, accounting for 52.71% of total revenue, but with a low gross margin of only 2.75% [10][11] - The company has faced continuous losses from 2021 to 2023, although it expects a recovery in 2024 due to AI and consumer electronics demand [11] - The company reported a significant increase in confirmed revenue from its computing power business, reaching 1.988 billion yuan in 2024, a year-on-year growth of 5303.3% [14] Group 3: Strategic Initiatives and Future Outlook - Hongxin Electronics has aggressively pursued AI computing power initiatives, including a 1 billion yuan investment in a project in Gansu [12][15] - The company has secured various strategic partnerships and contracts, including a 1.35 billion yuan order with a state-owned enterprise [15] - Despite the growth in computing power revenue, the company faces challenges with high debt levels, a debt-to-asset ratio of 78.85%, and significant financial costs impacting profitability [20]