After the opening of the Hong Kong stock market today, $STAR SHINE HLDG (01440.HK)$ The share price plummeted, with the largest intraday decline exceeding 79%, and closing down 50.52% at midday. On the news front, the Hong Kong Securities and Futures Commission named Star Shine Hldg for having highly concentrated shareholding.

Of note is that since September this year, the share price of Star Shine Hldg has been steadily rising. On November 13, it soared to a high of 18.1 Hong Kong dollars per share, representing a staggering 1107% increase from the low point of the year, drawing significant market attention.

Analysts point out that from an operational perspective, Star Shine Hldg is a relatively traditional manufacturing company with limited growth prospects, which contrasts sharply with its astonishing share price surge. Despite the continuous rise in Star Shine Hldg's share price, trading volume remains very thin, indicating clear signs of control over the stock.

As of the midday close of the Hong Kong stock market, the Hang Seng Index fell by 1.32%, the Hang Seng Tech Index dropped by 1.28%, IP economy concept stocks retreated, Starplus Legend fell by over 7%, and Miniso fell by nearly 4%.

Suddenly plummeted.

On November 28, after the opening of the Hong Kong stock market, Star Shine Holdings (01440.HK) plummeted, with a maximum intraday decline of over 79%, dropping to a low of 2.8 Hong Kong dollars per share. The decline narrowed slightly afterwards, and by the midday close, the decrease still exceeded 50%, with a trading volume exceeding 27 million Hong Kong dollars. The latest total market value is 8.417 billion Hong Kong dollars.

On the news front, the Hong Kong Securities and Futures Commission specifically mentioned the high concentration of equity in Star Shine Holdings.

On November 27, the Hong Kong Securities and Futures Commission announced that it had recently inquired about the distribution of equity in Star Shine Holdings. The inquiry results showed that as of November 15, 2024, there were 25 shareholders and related parties collectively holding 0.279 billion shares of the company, accounting for 22.13% of the company's issued share capital.

The inquiry results also showed that as of November 15, 2024, 0.431 billion shares of the company (34.17% of the issued share capital) were collectively held by shareholders who directly or indirectly acquired the company's shares from the controlling shareholder through OTC trades. These shares, along with 0.389 billion shares held by one controlling shareholder of the company (30.83% of the issued share capital) and 53.135 million shares held by two executive directors of the company (4.22% of the issued share capital), amount to 91.35% of the company's issued share capital.

Therefore, Star Shine Holdings has only 0.109 billion shares (8.65% of the issued share capital) held by other shareholders.

The Hong Kong Securities and Futures Commission reminds that given the high concentration of equity in the company among a small number of shareholders, even with a small amount of shares traded, the company's share price may fluctuate significantly. Shareholders and prospective investors are advised to exercise caution when trading the company's shares.

Prior to today's opening, Star Shine Holdings also issued a notice stating that they have noted the announcement published by the Hong Kong Securities and Futures Commission. The board of directors has decided to take steps to verify the matters mentioned in the announcement. The company will issue another announcement as soon as practicable to provide the market with the latest information.

In the announcement, Star Shine Holdings stated that based on the information obtained and inquiries made by the directors, the company confirms that as of November 15, 2024, and the announcement date, the public holds no less than 25% of the company's issued shares. The company is able to comply with the public shareholding requirements of the Listing Rules of the Stock Exchange.

From the stock price performance since the beginning of this year, Sing Holdings can be described as a "big bull stock" in the Hong Kong stock market. On November 13, the highest stock price of Sing Holdings soared to 18.1 Hong Kong dollars, reaching a historical high, with a cumulative increase of up to 1107% compared to the low point of the year (1.5 Hong Kong dollars). Such a huge increase has attracted high market attention.

What is puzzling is that although the stock price of Sing Holdings continues to rise, the trading volume appears very weak.

It is reported that Sing Holdings successfully listed on the Hong Kong Stock Exchange on January 13, 2021. In the more than three years after the listing, the stock price has long fluctuated around 2 to 3 Hong Kong dollars.

Sorting through the news, during this round of significant stock price increase, Sing Holdings released an announcement that a memorandum of understanding was signed regarding the possible cooperation to host a Hong Kong tour exhibition of a Portuguese football megastar museum brand. The contracting parties of the memorandum of understanding have entered into subscription agreements, partnership agreements, and loan agreements to carry out and develop CR7 Museum HK through joint ventures.

Sing Holdings stated that as the host of CR7 Museum HK, this project will increase the group's sources of income and promote the group's corporate image and reputation in the global market.

Is this crazy speculation?

Public information shows that Sing Holdings is a long-established lace manufacturer and dyeing service supplier in the textile industry, headquartered in Fuzhou City, Fujian Province, China. It was formerly known as Derun Holdings Limited, established in 2019. On June 30, 2023, Derun Holdings changed its stock abbreviation to "Sing Holdings".

The company's business model mainly involves the manufacturing and sales of lace products for individual orders, supplying customers with branded women's lingerie products. The company's dyeing services are primarily for lace and swimwear manufacturers, downstream companies supply Derun Holdings with their own lace and swimwear fabrics, for Derun to further process them before dyeing.

Analysts pointed out that in terms of business operations, Star Shine Holdings is a relatively traditional manufacturing company, with limited growth prospects, which stands in stark contrast to its astonishing share price increase, indicating obvious signs of speculative trading driven by capital control.

In terms of performance, in the first half of this year, benefiting from the strong performance of the footwear business and the recovery of market demand, Star Shine Holdings achieved a significant increase in revenue, recording a revenue of 0.273 billion yuan (RMB, the same below), a YoY growth of 480.89%. Among them, the income from footwear business grew rapidly, up to 5 to 6 times compared to the same period in 2023.

However, the embarrassing part is that Star Shine Holdings has fallen into the dilemma of increasing revenue but not profitably. The financial report shows that in the first half of this year, the company recorded a shareholder net loss of 0.948 million yuan, narrowing by 82.93% YoY; with a basic loss per share of 0.08 cents.

Taking a longer-term view, Star Shine Holdings has experienced huge fluctuations in business performance and often faces losses.

According to financial data, from 2021 to 2023, Star Shine Holdings achieved revenues of 0.166 billion yuan, 0.134 billion yuan, and 0.317 billion yuan, with YoY growth rates of -16.39%, -19.16%, and 136.56% respectively; achieving shareholder net profits of 21.182 million yuan, -8.937 million yuan, and -10.091 million yuan, turning from profit to loss in 2022 and continuing into the first half of this year.

Editor/rice