Despite a loss of billions, why is the stock price soaring? Holitech Technology (002217.SZ) received a letter of concern from the Shenzhen Stock Exchange requesting an explanation if there has been a significant change in the company's fundamentals.

On February 26, Holitech Technology (002217.SZ) received a letter of concern from the Shenzhen Stock Exchange. The Shenzhen Stock Exchange pointed out that the company is expected to have a net loss attributable to shareholders of the listed company of between 9 billion and 12 billion yuan in 2023, and the equity attributable to owners of the parent company at the end of the reporting period is expected to be between -6.51 billion and -3.51 billion yuan. However, the company's stock has increased by 77.27% from February 8, 2024 to February 26, 2024. On the evening of February 26, the Shenzhen Stock Exchange issued a letter of concern to Holitech Technology. The Shenzhen Stock Exchange requested Holitech Technology to pay attention to and verify relevant matters, confirm whether there are any significant information that should be disclosed but has not been disclosed, and whether there have been significant changes in the company's fundamentals. They also requested an investigation into whether there have been any transactions involving the buying or selling of company stock by directors, supervisors, senior management personnel, and their immediate family members in the past month, and whether there are any suspicions of insider trading. On the evening of February 5, Holitech Technology issued an announcement stating that they had received a "Notice Letter" from the applicant, Fujian Huamin Finance Leasing Co., Ltd. (Fujian Huamin). Fujian Huamin has submitted materials to the Intermediate People's Court of Fuzhou City, Fujian Province (Fuzhou Intermediate Court) applying for the company's restructuring and pre-restructuring on the grounds that the company is unable to repay its matured debts and its assets are insufficient to repay all debts, but it still has restructuring value and the ability to conduct independent negotiations with major creditors. According to the relevant regulations, the company has conducted a comprehensive self-examination of the use of funds, external guarantees, and performance commitments by the controlling shareholders, actual controllers, and other related parties. As of the date of the announcement, there is no non-operating use of the company's funds by the controlling shareholders, actual controllers, and other related parties, and there is no unauthorized external guarantee. In the announcement, Holitech Technology stated that as of now, they have not received any documents from the Fuzhou Intermediate Court initiating pre-restructuring or accepting restructuring applications. Holitech Technology expressed that they will actively communicate with the court, regulatory authorities, government departments, creditors, and other relevant parties, and that the relevant matters are progressing closely and the company will continue to actively cooperate with the court's work. On January 20, in an announcement made by Holitech Technology, as of January 19, the overdue debt amount owed by the company and its subsidiaries to banks, financial leasing companies, and other financial institutions had reached 2.08 billion yuan (including: 5.88 million US dollars), accounting for 37.92% of the audited net assets in 2022. It is worth noting that earlier, the secretary of the board of directors of Holitech Technology revealed to investors on an interactive platform that the company is still cooperating with leading mobile phone manufacturers and that their customer base is relatively stable. However, due to liquidity shortages and debt pressure, Holitech Technology had to reduce its order intake, missing out on the first round of industry recovery. Industry experts have stated that in the current industry recovery situation where the company's negative factors have been exhausted, if Holitech Technology can successfully save itself and survive the darkness before dawn, it may have the possibility of a phoenix rebirth with the help of its current advantageous industry. Currently, Holitech Technology is actively communicating with creditors, making efforts to resolve the debt crisis, and ensuring the company's sustainable operational capability.