Rising over 10% for two consecutive days, the "Internet-famous" rice brand Shiyue Daotian (09676) saw another anomaly. In the afternoon of the 22nd, the stock price of Shiyue Daotian surged rapidly, with trading volume also increasing simultaneously, with an intraday fluctuation rate of 19.07%; on the 23rd, the stock price continued to rise after the market opened, closing at 10.04 Hong Kong dollars, with two consecutive days of active trading, turnover ratios reaching 11.43% and 12.78% respectively.

The unexplained abnormal fluctuations are not new for Shiyue Daotian. As early as October 8th, the company's stock once surged to 100 Hong Kong dollars intraday, followed by continuous decline over the next few trading days, reaching a low of around 7.79 Hong Kong dollars, almost halving from the IPO price of 15.36 Hong Kong dollars per share.

On the news front, prior to its listing, Shiyue Daotian welcomed the lifting of restrictions for pre-IPO investors on October 14th, plummeting by 33% on the day. Since the lifting of restrictions, it has rebounded by over 28%. In recent days, southbound funds have continuously increased their holdings of the stock, with Stock Connect holding 40.9854 million shares of Shiyue Daotian, accounting for 15.98% of the outstanding shares as of the close on the 22nd.

For listed companies, the lifting of restrictions usually means increased market liquidity and provides early investors with the opportunity to sell and exit. With the rebound in stock price after the lifting of restrictions, does it mean that the market still has optimistic expectations for the future development of Shiyue Daotian?

The majority of the "acquiring" parties are Stock Connect retail investors.

Public data shows that the top three net sellers today are Merrill Lynch, HSBC, and BOCI, selling 0.4233 million shares, 0.2133 million shares, and 94,200 shares respectively, while the largest buyer is Stock Connect retail investors, with Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect buying 1.1241 million shares and 547,500 shares respectively.

Looking at historical data, in the recent five days (up to the 22nd), Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect bought 14.715 million shares and 6.4824 million shares respectively, with Futu Securities selling 14.7326 million shares as the largest seller, followed by Morgan Stanley selling 3.7298 million shares.

According to the Wise Finance APP, before the listing of shiyue daotian, the equity was relatively concentrated, with the founder's family holding more than 70% of the shares, of which Wang Bing and Zhao Wenjun jointly held nearly 32%. In addition to the founder couple, there are also two executive directors in the company's board of directors who come from the founder's family. The general managers of the two main subsidiaries of shiyue daotian, Shenyang Xinchang and Wuchang Caiqiao, are respectively Zhao Wenjun's nephew and sister, and the shareholders are also members of the founder's family.

Due to the relatively concentrated ownership, combined with the low proportion of cornerstone investments in the company, accounting for about 13.51% of the global issuance, and only Xintian Time as the cornerstone investor, shiyue daotian has relatively few outstanding shares, making the stock price prone to significant fluctuations resembling a roller coaster.

For a long time, due to being in the relatively niche agriculture sector, the capital markets were not enthusiastic about shiyue daotian, and the company's fundamentals were mediocre. Clearly, there are underlying reasons for the abnormal stock price fluctuations. As the block orders continue to drive up the stock price, retail investors entering with a speculative mindset can only be described as the "reverse side of high returns" or facing high risks.

Achieved a turnaround from loss to profit in the first half of the year.

Shiyue daotian was listed on the Hong Kong Stock Exchange on October 12, 2023. It is a leading enterprise in the Chinese kitchen staple food industry, mainly engaged in the production and sale of pre-packaged high-quality rice, miscellaneous grains, beans, and dried products.

Previously, the interim performance announcement showed that for the six months ended June 30, 2024, the company achieved revenue of 2.621 billion yuan, a year-on-year growth of 17.7%; gross profit reached 0.444 billion yuan, a significant increase of 36.2% year-on-year; adjusted net income was 0.149 billion yuan, a 30.6% year-on-year increase. In addition, the gross margin also increased from 14.7% in the same period last year to 17.0%, mainly due to the company's continuous adjustments in product structure and sales prices, ongoing adjustments in channel structure and strategic layout, reducing investments in certain low-margin channels.

This is also the first time the company has achieved positive profitability after going public. From 2021 to 2023, shiyue daotian incurred losses of approximately 0.1729 billion yuan, 0.5642 billion yuan, and 64.86 million yuan respectively, with a cumulative loss of nearly 0.8 billion yuan.

In terms of product structure, the company's corn product sales revenue saw a significant increase in the first half of the year. Other products centered around corn, miscellaneous grains, beans, and other products achieved rapid growth in the first half of the year, generating revenue of 0.726 billion yuan, a 151.9% year-on-year increase, with the revenue proportion rising to 27.7%; revenue from rice products was 1.707 billion yuan, a decrease of 1.9% from the same period last year's 1.739 billion yuan.

In terms of channels, the online channel sector maintained a rapid growth of 14.3% in the first half of the year, while the offline channel sector's revenue share increased by about 2 percentage points to 32.2%, with all three major sub-channels including supermarkets achieving revenue growth.

Unlike traditional staple food companies such as Yihai Kerry Arawana Holdings and Fulinmen, which focus deeply on offline sales networks, Shiyue Daotian was one of the earliest kitchen staple food companies to explore online channels. The company has built its brand into a 'internet celebrity' through online marketing methods such as live streaming, celebrity endorsements, and brand days. As of March 31, 2023, Shiyue Daotian has cooperated with more than 4,000 KOLs and KOCs.

However, excessive marketing expenses remain a heavy burden on the company's profitability. From 2021 to 2023, the company's sales and distribution expenses were 0.223 billion yuan, 0.315 billion yuan, and 0.3241 billion yuan, accounting for 6.2%, 7.0%, and 6.7% of the company's total revenue for the same period, respectively. In the first half of this year, Shiyue Daotian's sales and distribution expenses further expanded, increasing by 47.9% to 0.2396 billion yuan.

Furthermore, significant pre-IPO dividends to the controlling shareholders have sparked significant controversy in the market. The prospectus shows that in 2022, Shiyue Daotian's administrative expenses were 0.858 billion yuan, including a high stock award of 0.691 billion yuan to the founders Wang Bing and Zhao Wenjun, with the company's net loss of 0.564 billion yuan in the same year. In a weak fundamental state, frequent price fluctuations cast more doubts on the company's true value.