After a sharp decline, KINGFARPROPERTY (01354) surged more than 30% in a single day, with an increase of over 187% in the past 14 trading days.

Over 30% increase, KINGFARPROPERTY (01354) is undoubtedly the most eye-catching "youngster" in the Hong Kong stock market recently. On November 19, KINGFARPROPERTY surged in the intraday trading, rising from over 3 points to 10 points and then 20 points. The stock rose significantly in a step-by-step manner, closing with a 33.10% increase, leading the Hong Kong stock market with a price of 37.8 Hong Kong dollars, a trading volume of 2.7861 million Hong Kong dollars, and a latest total market value of 2.52 billion Hong Kong dollars. Moreover, looking at the longer-term trend, the stock price of KINGFARPROPERTY in recent times can be described as "a long rainbow" - in the 14 trading days from October 31 to now, the stock has risen by over 187%, with increases of 17.96%, 28.29%, and 25.91% recorded on October 31, November 6, and November 15 respectively. However, comparing this to its recent sharp declines, it is really "like night and day". On September 20, KINGFARPROPERTY opened low and continued to decline, dropping by 17.11% at one point during the day. By the end of the day, the stock closed at 17.58 Hong Kong dollars, a decrease of 9.38%. On September 12, the stock experienced a "Black Thursday", with a one-day decline of 26.58%. After the sharp decline comes a sharp rise, and the roller-coaster-like movement of KINGFARPROPERTY cannot help but attract attention. As the saying goes, there must be a mystery behind the anomaly, and now it seems that there must be a secret behind the sharp rise of KINGFARPROPERTY. Behind the continuous sharp rise in stock price In fact, the roller-coaster-like trend as described earlier actually occurred shortly after KINGFARPROPERTY went public. On July 3 this year, KINGFARPROPERTY officially listed on the Hong Kong stock market. On the day of listing, the stock price of KINGFARPROPERTY fell below the IPO price of 7.5 Hong Kong dollars, and on July 5, it hit a new low of 5.1 Hong Kong dollars during trading. However, after that, KINGFARPROPERTY turned around and started to rise. Over the next two months, the stock continued to rise sharply, eventually reaching 30.9 Hong Kong dollars on September 10, a increase of 3.12 times from the IPO price, and more than 5 times from the lowest price. In general, this kind of unusual trend in the Hong Kong stock market is often related to characteristics such as a relatively small market capitalization, limited total circulation, and high concentration of chips. According to publicly disclosed information, before listing, KINGFARPROPERTY had a shareholder structure where Jingfa Holding owned 88.5% of Jingfa Group. Among them, the Xi'an Economic and Technological Development Zone Commission held 7.5% through Jingfa Holding and 67.5% through Jingfa Group, meaning that there is a relatively concentrated controlling shareholder behind Jingfa Group, with this part of the equity relatively concentrated in the hands of a few main entities. In addition, at the time of the IPO, KINGFARPROPERTY globally sold a total of 16.668 million H shares, accounting for 25% of the total shares after the offering was completed. Currently, KINGFARPROPERTY's total market value is 25.2 billion Hong Kong dollars, with a market capitalization of only 6.3 billion Hong Kong dollars, which indicates that the company has relatively small market value and limited total circulation. However, it should be noted that most of the stocks in the Hong Kong stock market that experience sharp rises and falls have similar characteristics of small circulation market capitalization. It is understood that in the process of seeking listing, KINGFARPROPERTY introduced three cornerstone investors, namely Xi'an Tianbo Diagnostic Technology Co., Ltd. (hereinafter referred to as "Tianbo Diagnostic"), Xi'an Dianguan Education Technology Co., Ltd. (hereinafter referred to as "Dianguan Education"), and THE REYNOLD LEMKINS GROUP (ASIA) LIMITED (hereinafter referred to as "Reykay Group"), with a total shareholding of 10.76%. Among them, Tianbo Diagnostic subscribed for 4.3911 million shares of KINGFARPROPERTY, Dianguan Education subscribed for 1.4637 million shares, and Reykay Group subscribed for 1.32 million shares. It should be pointed out that although they are all cornerstone investors, the lock-up period for the shares held by the three institutions is different. The lock-up period for the two "hometown" shareholders of KINGFARPROPERTY is July 2, 2025, while Reykay Group's shares will be unlocked six months in advance, on January 3 next year. If the stock price of KINGFARPROPERTY remains high at that time, then it would be worth paying attention to whether the profitable Reykay Group will take the opportunity to exit. Furthermore, looking at the recent top 20 net buying/selling brokers of KINGFARPROPERTY over the past 20 days, as of November 18, Bright Smart, Bank of China, and Futu Securities were the top three net buying brokers for the company, buying 21.7847 million shares, 0.7848 million shares, and 0.2565 million shares respectively. Among them, Futu Securities, as a retail investor "gathering place", has clearly attracted a large number of retail investors to enter the market due to the recent strong rise in the stock price. Therefore, for the retail investors who have entered the market due to the continuous rise in the stock price of KINGFARPROPERTY, whether this is an opportunity for growth or a tempting trap, only time will tell. Stable growth behind performance Looking through its operating history, KINGFARPROPERTY, established in 2000, is a state-owned enterprise in Shaanxi Province, China with business networks spread across the northwest region of China. According to data from China Index Research Institute, based on the construction area managed by Shaanxi Province as of the end of last year, KINGFARPROPERTY ranks third among property management service providers operating in Shaanxi Province, with a market share of about 1.8%. And by the end of 2023, KINGFARPROPERTY provided public property management services, basic residential property management services, and basic commercial property management services for 149 projects in China. Property management, with a total managed building area of approximately 14.607 million square meters.In recent years, the real estate industry has entered a downturn cycle, and it is an undeniable fact that it has reached the "bottom of the market". Most companies are experiencing a situation where they are "increasing revenue but not increasing profits", and the significant weakening of profitability is also a reality. KINGFAR PROPERTY is no exception. Despite maintaining a growth trend in revenue in recent years, the profitability of KINGFAR PROPERTY has been continuously weakening. Specifically, from 2021 to 2023, the company's revenue increased from 594 million yuan to 862 million yuan, and net profit increased from 31.55 million yuan to 51.018 million yuan. Although the company's net profit has increased with the growth of revenue, it seems that the company has not been able to further improve its profitability. Data shows that during the same period, KINGFAR PROPERTY's gross profit margins were 14.5%, 14.3%, and 13.7%, showing a downward trend year by year. In the first half of this year, with the help of measures such as actively expanding business and improving management levels, KINGFAR PROPERTY continued to achieve steady growth in performance. During the period, the company achieved revenue of 463 million yuan, an 18.57% year-on-year increase; net profit of 3.003 million yuan, a 22.95% year-on-year increase, and a gross profit of 69.65 million yuan, a 25% year-on-year increase. Similar to the above contrasting state, despite steady growth in performance, there are still many development concerns surrounding KINGFAR PROPERTY. On one hand, most of KINGFAR PROPERTY's business is concentrated in its headquarters in Xi'an, with limited expansion into other cities, which limits its operational flexibility. Once the market environment in the region changes, such as economic downturn, real estate market depression, increased competition, the company's business development will be significantly affected. On the other hand, KINGFAR PROPERTY also has a significant "concentration of major customers". In the years 2021 to 2023, the revenue generated by providing services to the Xi'an Economic and Technological Development Zone Management Committee accounted for 33.9%, 31.9%, and 27.1% respectively; during the same period, the revenue generated by providing services to the Economic and Technological Development Holdings Group also reached 7.6%, 7.4%, and 6.2%. Interestingly, the Economic and Technological Development Holdings Group is the controlling shareholder of KINGFAR PROPERTY, and the Xi'an Economic and Technological Development Zone Management Committee is the actual controlling entity behind it. It can be seen that at present, KINGFAR PROPERTY's business still heavily relies on the related party, Xi'an Economic and Technological Development Zone Management Committee, which poses a significant challenge to the company's long-term growth potential. In conclusion, while KINGFAR PROPERTY's revenue and net profit show a steady growth trend, the company's long-term growth potential still has a high degree of uncertainty under the influence of regional business and dependence on major customers. In other words, in the face of performance uncertainty, it is clear that KINGFAR PROPERTY's stock price is unlikely to maintain a continuous upward trend, and investors may need to proceed cautiously.