After the initial public offering, the stock price of KINGFAR PROPERTY (01354) skyrocketed five times before dropping back, leading to speculation that the release of cornerstone shares may cause the stock price to decline before the lock-up period expires.

Less than 100 days after its debut on the market, "Shaaxi's number one property stock" KINGFARPROPERTY (01354) has experienced the ups and downs of stock price skyrocketing and crashing. On September 20th, KINGFARPROPERTY opened low and continued to decline, dropping by 17.11% at one point during the day. By the end of the day, KINGFARPROPERTY closed at HK$17.58, a decrease of 9.38%. It is worth mentioning that this is the fourth time in the past 7 trading days that KINGFARPROPERTY has recorded a decline of more than 5%. Especially on September 12th, the stock experienced a "Black Thursday", with a single-day drop of a staggering 26.58%. But if we turn the clock back, the trend of KINGFARPROPERTY's stock price would be a different story. After listing on July 3rd, KINGFARPROPERTY's stock price once fell below the issue price of HK$7.5, and on July 5th it hit a new low of HK$5.1 during trading. However, after that, KINGFARPROPERTY turned upwards, and over the next two months, the stock continued to rise sharply, eventually reaching HK$30.9 on September 10th, which was 3.12 times the issue price, and more than 5 times the low point. From a debut on the market with a break, to a threefold increase in just two months, and now a 40% drop in stock price over 7 trading days, KINGFARPROPERTY's stock price trend can be described as unpredictable. Behind this strange trend, there may be objective factors favoring speculation in the stock price of KINGFARPROPERTY, such as its relatively small market value, limited total circulation, and high concentration of chips that facilitate price manipulation; at the same time, the stock was pushed up during the lock-up period early, which may be beneficial for those cornerstone investors who assisted before the listing to exit. Public information shows that before listing, in the shareholder structure of KINGFARPROPERTY, Xi'an Economic and Technological Development Zone Administration held 7.5% through Economic Development Holdings and 67.5% through Economic Development Group. At the time of the IPO, KINGFARPROPERTY globally sold a total of 16.668 million H shares, accounting for 25% of the total shareholding upon completion of the issuance. During the listing process, KINGFARPROPERTY introduced three cornerstone investors, namely Xian Tianbo Diagnostic Technology Co., Ltd., Xian Dianzhun Education Technology Co., and THE REYNOLD LEMKINS GROUP (ASIA) LIMITED, with a total shareholding of 10.76%. Based on the closing situation on September 20th, although KINGFARPROPERTY's total market value reached HK$1.172 billion, its circulating market value was only HK$293 million, and excluding the above-mentioned important shareholders, the total holding proportion of other public shareholders was less than 15%. This indicates that KINGFARPROPERTY's circulating market value is not high and its equity concentration is not low. During the process of the stock's sharp rise and fall, the trading volume and turnover rate of KINGFARPROPERTY have actually remained at a relatively low level, with a turnover rate of less than 3% on September 20th, even though the trading volume was only HK$7.439 million, and yet the closing decline was close to 10%, similar to other cases in the Hong Kong stock market where high chip concentration has caused large fluctuations in stock prices. In addition, the identities and unlocking times of the three cornerstone investors who assisted KINGFARPROPERTY's successful listing are also worth noting. In terms of background, both Tianbo Diagnostic and Dianzhun Education can be considered "hometown" companies for KINGFARPROPERTY, as all three companies are from Xi'an, Shaanxi. Tianbo Diagnostic, established in 2014, is located in the Xi'an Economic and Technological Development Zone and is a service provider in the IVD industry dedicated to providing comprehensive solutions for medical laboratories, with Meng Wujun as the actual controller; Dianzhun Education was founded in 2017 with the same registered address in the Xi'an Economic and Technological Development Zone, and Ding Huaming as the major shareholder. Compared to the above two companies, the other major cornerstone investor of KINGFARPROPERTY, The Reynold Lemkins Group, may be more familiar to investors. According to public information, The Reynold Lemkins Group is a typical single-family office with a history of over 30 years. Since 2024 alone, The Reynold Lemkins Group has participated in several Hong Kong IPO projects, and besides KINGFARPROPERTY, The Reynold Lemkins Group has also been a cornerstone investor in companies such as EDA Group Holdings and TIANJUDIHE. According to public announcements, Tianbo Diagnostic subscribed for 4.3911 million shares of KINGFARPROPERTY, Dianzhun Education subscribed for 1.4637 million shares, and The Reynold Lemkins Group subscribed for 1.32 million shares. It is interesting to note that despite being cornerstone investors, the unlocking times for the shares held by the three institutions are different. Both "hometown" shareholders of KINGFARPROPERTY have a lock-up period until July 2, 2025, while The Reynold Lemkins Group is allowed to unlock its shares half a year earlier, on January 3rd next year. If the stock price of KINGFARPROPERTY remains high at that time, it will be interesting to see if the profit-rich The Reynold Lemkins Group will choose to exit first. Looking at the fundamentals of KINGFARPROPERTY, at least in terms of the data on paper, the company is in a hot upward trend. In the first six months of this year, KINGFARPROPERTY achieved a revenue of 463 million yuan and a net profit of 31.003 million yuan, representing an increase of 18.57% and 22.95% year-on-year in terms of net profits. Both core financial data showed significant growth, which is particularly outstanding in the property industry that is still in a period of adjustment. However, behind the seemingly attractive data, KINGFARPROPERTY's growth pattern is still uncertain.The true height of Kingfar's strength is definitely worth exploring for investors. On the one hand, Kingfar's business activities are highly concentrated in the city of Xi'an, which means that if the company cannot achieve significant breakthroughs outside of Xi'an, the company's growth ceiling will be very low. On the other hand, at present, Kingfar's business still heavily relies on its affiliated party, the Xi'an Economic Development Zone Management Committee. Although it is good to be backed by a big tree, Kingfar ultimately needs to develop more new customers in order to open up growth opportunities further in its business.Looking ahead, considering the extremely low market value and high concentration of chips of KINGFAR PROPERTY, the future price trend of KINGFAR PROPERTY is expected to be anything but flat. Especially as time goes on, there may be more speculative funds involved in trading before and after the unlocking of shares held by two major investors. At that time, the volatility of the stock may further increase, so retail investors need to be aware of the investment risks.