Core Viewpoint - The rapid decline of New Ming China’s stock price, which fell 90% in three days, highlights the vulnerabilities of small-cap stocks in the Hong Kong market, driven by liquidity issues, concentrated shareholding, and forced selling by major shareholders [1][3][10]. Group 1: Stock Performance - New Ming China’s stock plummeted from 4.32 HKD to 0.46 HKD over three days, with a peak drop of 84.2% in a single day [1][3]. - The stock experienced a daily trading volume spike, with a turnover rate of 118.20% on October 2, indicating panic selling [6][10]. Group 2: Financial Health - The company reported a total revenue of only 33.1 million HKD for the first half of the year, a 57.9% year-on-year decline, and a significant loss of 137 million HKD attributable to shareholders [3][10]. - New Ming China’s balance sheet showed total assets of approximately 2.125 billion HKD against total liabilities of 5.822 billion HKD, indicating severe insolvency [3][10]. Group 3: Market Dynamics - The absence of a price limit mechanism in the Hong Kong market allows for unrestricted stock price fluctuations, exacerbating volatility for small-cap stocks [6][10]. - The concentrated ownership structure in many small-cap stocks means that even minor trades can lead to significant price movements, particularly when major shareholders face margin calls [4][10]. Group 4: Legal and Operational Issues - New Ming China faced multiple legal disputes, including a significant case involving a 24.68 million HKD payment owed to a construction management group, reflecting operational and financial distress [9][10]. - The company had 26 legal cases with a total amount of 43.11 million HKD, indicating ongoing financial and operational challenges [10]. Group 5: Broader Implications - The case of New Ming China is not isolated; it reflects a broader trend in the Hong Kong small-cap market where liquidity shortages and speculative trading lead to extreme volatility [10][11]. - Historical examples of similar collapses in the market underscore the risks associated with small-cap stocks characterized by poor financial health and concentrated ownership [9][10].