The "overflow effect" after the dance of SANERGY GROUP (02459): Will the old stock of flashing collapse and rise to the sky?

On September 5th, the Hong Kong stock market's list of top gainers was dominated by a group of old "flash crash stocks". It is worth noting that SANERGY GROUP (02459), which seized the top spot on Tuesday due to a flash crash, continued its strong rebound trend from the previous trading day. In the morning session, SANERGY GROUP quickly rose after opening low, with the largest intraday increase reaching almost 70%. By the close of trading, the stock had risen by 34.48% to 0.78 Hong Kong dollars, with the increase falling significantly from its intraday high, but still remaining among the top gainers. In the previous trading day, SANERGY GROUP had a closing gain of 78.46%. Possibly influenced by SANERGY GROUP's consecutive violent rebounds, hot money in the market seems to be speculating on "flash crash stocks". On September 5th, LONGHUI INTL (01007) saw a sudden surge in its stock price, with gains of over 30% nearing the midday close. In the afternoon, the stock continued to rise strongly and closed at 0.25 Hong Kong dollars, a staggering increase of 60.26%. Furthermore, today's list of top gainers also included NEWLINK TECH (09600), which saw continuous gains after opening today, with the largest intraday increase exceeding 70%, but closing at 28.77%, at 0.47 Hong Kong dollars. It is worth mentioning that looking at the historical performance of these stocks, one common characteristic is that all three of them have experienced a sharp single-day decline recently. Taking SANERGY GROUP, with a relatively large market value and high market attention, for example, from May to August this year, the stock experienced a sharp upward trend, with a maximum gain of over 4 times during that period. Short-term accumulation of significant gains for a company with deteriorating fundamentals can be considered a "original sin", especially considering that on September 2nd, SANERGY GROUP received a warning from the Hong Kong Securities and Futures Commission regarding "high concentration of equity". As expected, panic quickly spread after the opening of trading on September 3rd, with SANERGY GROUP's stock price dropping by 98.4% that day, leading to a forced liquidation of the 370 million shares held by the controlling shareholder. However, in the unpredictable stock market, the panic-induced selling pressure often brings opportunities for short-term oversold rebounds. Looking at SANERGY GROUP, as of today's closing price, the company's stock price has rebounded by 457.1% from its low point on September 3rd. Considering the significant wealth losses of investors in the two previous trading days due to the sharp declines, it is indeed a reflection of the unpredictable nature of the stock market. On one hand, there are hot funds willing to push up SANERGY GROUP against the trend, and it is not surprising to see similar situations in other stocks that are being followed by speculative funds with high returns. Taking LONGHUI INTL, which topped the list of top gainers on the Hong Kong stock market on September 5th, for example, even though the company's market value is only over 40 million Hong Kong dollars, its performance this year has been tumultuous. From the end of March to July, the company experienced a one-sided uptrend, with the stock price skyrocketing from 0.59 Hong Kong dollars per share to 4.74 Hong Kong dollars per share, accumulating a total gain of over 7 times in four months. Then, things took a turn, as LONGHUI INTL started to decline from July 29th, and reached a "climax" on August 7th: in the early trading session, LONGHUI INTL experienced a sudden plunge, with a drop of 80% within half an hour, and then oscillated to find a bottom. By the end of that day, the stock had fallen by 90.2%, with a turnover rate of over 40%, and the price retreated to 0.345 Hong Kong dollars, even lower than when the market started. For the remaining days of August, LONGHUI INTL continued its trend of declining on low volume, reaching 0.15 Hong Kong dollars in intraday trading on September 3rd, setting a new historical low. However, today, LONGHUI INTL's stock price once again showed a dramatic scene: despite no apparent positive news, the company's stock price surged significantly. Taking into account the company's recent interim report, it is clear that LONGHUI INTL's fundamentals do not have many bright spots. Public information shows that LONGHUI INTL was listed on the Hong Kong Stock Exchange through a backdoor listing in 2018, and the company mainly operates "Hui Ge Hot Pot" and "Xiao Hui Ge Hot Pot" restaurants in China. Although it successfully fulfilled its "capital dream", LONGHUI INTL's operating conditions have deteriorated since going public. In the first half of this year, LONGHUI INTL's revenue decreased by 34.7% year-on-year to 29.403 million yuan, and while revenue declined, the company also fell into a deepening loss, with a net loss of -5.617 million yuan in the period, further expanding from the loss of -2.325 million yuan in the same period last year. By the end of June, LONGHUI INTL's number of restaurants had dropped to single digits, with only 9 remaining. Considering that constraints on the service industry's economic recovery still exist and consumer purchasing power needs further improvement, it is clear that LONGHUI INTL, mainly targeting middle to high-income groups, will face challenges in overcoming its operational difficulties. With a lackluster track record and no growth expectations, today's stock price movement for LONGHUI INTL can probably be attributed to active funds speculating on it. The situation for NEWLINK TECH is quite similar. According to the company's previously disclosed interim report, the company's revenue in the first half of the year was 123 million yuan, a slight increase of 4.2% year-on-year, but the net profit during the same period expanded significantly to 55.418 million yuan. Despite no significant positive performance, NEWLINK TECH's stock price movement has been quite "dramatic": the company's stock price rose by 506.06% in the month of May alone, followed by a volatile decline starting in mid-June, and ultimately a volume-induced drop of 80% at the end of trading on August 28th, giving back all the gains from May. Looking at these three stocks together, as all companies are in a downward trend in terms of performance and no substantial positive developments in their fundamentals recently, it is difficult for this author - as a spectator - not to define the movements in these stocks today as active funds seizing rebounds after overselling. Indeed, in the short term, due to excessive pessimism among shareholders and technical overselling, oversold securities often have some speculative value, but the timing of this speculation is not something that ordinary investors can easily grasp. Moreover, taking a longer-term perspective, the market ultimately balances out, and stock prices.The upward movement of the operating center ultimately still needs to be supported by performance.Je suis dsol, mais je ne comprends pas cette langue.