This year's takeoff of the low-altitude economy, especially with the support of intensive policies across the country, has allowed A-share investors to see the potential of this trillion-dollar arena. Wanfeng Auto Wheel, Citic Offshore Helicopter, Chongqing Zonsen Power Machinery, Lai's Info, and Zhejiang Jindun Fans have all become frequent stocks in the last year just like AI. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Among them, Wanfeng Auto Wheel, which structures mainframe business, has risen fourfold in just a few months with the hype of the low-altitude economy and flying cars, seeing its stock price go from 4.48 yuan to a high of 18.88 yuan.

However, while investors see the trend, capital sees the way out. Major shareholders, executives, and various institutions are all starting to sell off at a high price.

By the end of the first quarter, the number of shareholders in the company had skyrocketed to 187,300, four times that of the previous year's annual report. Clearly, after the surge, this company had become a "small shareholder's paradise".

01 Riding the trend again.

The appearance of the low-altitude economy concept brought spring to Wanfeng Auto Wheel, which focuses on the lightweight auto metal component industry and the low-altitude navigable airplane building industry.

Founded in 2001, Wanfeng Auto Wheel originally started with aluminum alloy rim manufacturing, leading the industry with an annual output of 18 million sets of automotive turbo scale. It is a matching supplier to many well-known car companies such as BMW, Mercedes-Benz, and Ford.

Aluminum alloy materials are widely used and mature in steam turbine production, with a penetration rate of nearly 80% and a highly concentrated market. In 2021, the top five manufacturers' combined share is 87.2%, with Wanfeng Auto Wheel at 10.6% in fourth place.

The new energy vehicle market has brought about the need for lightweight body parts, and magnesium alloy is currently the lightest commercially available metal structural material with abundant resources and easy recycling. In vehicles, it is mostly used for casings and bracket components. The domestic usage of magnesium per bike is still relatively low compared to other mature markets, and Wanfeng Auto Wheel formed its layout after acquiring leading foreign magnesium company Magnequench in 2015.

In addition, through continuous acquisitions, Wanfeng Auto Wheel has formed a lightweight business layout with magnesium alloys, aluminum alloys, and high-strength steel as the core. After expanding its territory in 2015, Wanfeng Auto Wheel performance began to thicken.

Do you still remember that wave of bull market from 2013 to 2015? The company's shares surged from a low of 8 yuan to 77 yuan (unadjusted), with its share price increasing sixfold.

On the revenue side, Wanfeng Auto Wheel's compound annual growth rate from 2013 to 2022 was 15%.

However, from 2016 onwards, revenue growth began to converge towards single-digit growth. At the company's then-P/E ratio, it naturally had to fall. In 2019-2020, the epidemic exacerbated supply chain costs and overseas market demand contraction, resulting in continuous decline in the company's revenue and profit.

Turning points started to emerge at that time.

In April 2020, Wanfeng Auto Wheel acquired a 55% stake in Wanfeng Aircraft Industry, entering the field of general aviation aircraft manufacturing. This is a general aviation aircraft manufacturer capable of whole-machine design and development and engine manufacturing, with aircraft manufacturing bases in Austria, Canada, China (Qingdao, Xinchang), and ranked in the top three in the global piston fixed-wing aircraft market (2022).

According to the company's 2023 report, the subsidiary had net assets of 4.75 billion yuan, a revenue of 2.67 billion yuan last year, and a net income of about 500 million yuan, reflecting the increase in aircraft orders and a business share of 16.7%.

The concept of the low-altitude economy quickly became a market focus point. In March, we analyzed "Flying Cars: The Next Trillion-Dollar Arena?"

Wanfeng Auto Wheel also followed the trend, announcing in early February this year that its subsidiary would form a joint venture with a partner to conduct deep cooperation in the field of eVTOL (electric vertical takeoff and landing aircraft), including research and development, co-construction of research and development and production facilities, airworthiness certification, and product sales.

So when the announcement was made, the stock price began to soar and could not be stopped.

After hovering at a low level for many years, the stock price started on February 6th and rose to a high of 17.31 yuan in less than two months, during which it hit 8 consecutive daily limit highs, attracting many investors to buy and pushing it to its highest level since 2017, with a cumulative increase of more than 200%. In terms of product structure, 100-300 billion yuan of product operating income were 401/1288/60 million yuan respectively.

From the perspective of the number of shareholder accounts and the holding cost, retail investors did not play a big role in the stock price, but the increase of 140,000 shareholder accounts has accumulated the holding cost in the high-priced area.

This indicates a strong mentality of chasing after the price, but the tense nerves cannot afford to make any mistakes. Just one careless move of playing a trick would result in hitting the limit down, and the investors would ultimately have bought into the concept.

Opportunity to ship in February.

On April 22, the stock price of Wanfeng Auto Wheel sealed the daily limit down, with a sealed single amount of up to 475 million yuan.

Just a week before (April 19), the company's stock price had just hit the daily limit up, and the price had fluctuated between daily limit rises and falls for two days, playing on the heartbeat.

The reason was that at the time there was a rumor that this strategic partner might be Tesla. On the 18th, an investor requested the company to respond to the progress on the interactive platform. Instead of clarifying the rumor, the company said, 'the two parties have jointly formed a project team to discuss business plans, investment plans, and link domestic and foreign technology, operations, and management teams,' which...

Investors were very happy about this, and the next day, not surprisingly, the stock rose limit up.

However, unexpectedly, just when everyone thought it had formed a joint venture with Tesla to produce eVTOLs, the company hastily denied the rumors on April 19th, clarifying the rumor of collaboration with Tesla.

This obviously misleading statement caused a significant fluctuation in the stock price and naturally did not escape the supervision of the exchange's regulatory letter.

In the process of rising stock prices, institutions did not play a big role, but instead, speculative interests, were particularly keen on this company. Several major ups and downs in the April dragon and tiger list, speculative interests were gathering chips, step by step leading retail investors to the top of the mountain.

CITIC Securities Xi'an Zhuque Avenue Branch has accumulated nearly RMB 230 million in multiple purchases of Wanfeng Auto Wheels. Among them, on April 11, it bought at RMB 5,291.83, and on April 19, it bought at RMB 119 million. It is worth noting that on the day of its purchase on April 11, Wanfeng Auto Wheel's stock price hit limit down.

Companies that like to ride the wave of concepts usually have obvious differences between them. Retail investors see this company as a golden pig in the wind, but institutions see it as an opportunity to ship products.

Those who seized this opportunity to reduce their holdings at a high level are not major shareholders or company executives, but insurance funds.

With holdings in the company's stock for 8 years, holding more than 188 million shares, accounting for 8.87% of the company's total share capital, the second largest shareholder, China Pacific Insurance (Group) Co., Ltd. (hereinafter referred to as 'CPIC Life') wants to reduce its holdings at a high level.

CPIC Life entered the company with funds in the third quarter of 2015. At that time, the announcement disclosed that CPIC Life bought 19.8326 million shares at a price of 16.39 yuan/share to 16.53 yuan/share in August 2015, and bought 23.0783 million shares at a price of 13.38 yuan/share to 30.11 yuan/share in September 2015.

However, CPIC Life did not reduce its holdings at the previous high point of the company's stock price in 2017 and has held onto it since then, going through increases in holdings and stock dividends before it was trapped for nearly 10 years.

The announcement stated that CPIC Life will reduce its holdings of the company's stock by no more than 9 million shares by centralized bidding within a month after 15 trading days since March 31st, and the current stock price is also at a high level in recent years.

At the time, the low-altitude economy concept was being hyped up in the secondary market, and this reduction plan also received a lot of market attention.

Before this reduction, CPIC Life held 8.87% of the shares, and after the reduction, its shareholding ratio was 8.44%. From April 24th to April 29th, CPIC Life reduced the shares by 9 million shares through centralized bidding, with an average price of 14.88 yuan/share, and a total cash-out of about 134 million yuan.

Similarly, during the same period, Northbound funds have also been reducing their holdings.

In 2022, Zhejiang Wanfeng Auto Wheel's performance rebounded, and Northbound funds began precise bottom fishing from the second quarter of 2022. Only in the second quarter of 2022, the position increased from 25.7962 million shares at the end of the first quarter to 49.0143 million shares at the end of the second quarter. Throughout the second quarter, Wanfeng Auto Wheel had a good increase following the large cap.

However, in the third quarter of 2023, Northbound funds began to continuously reduce their holdings of Wanfeng Auto Wheel on a large scale, the number of holdings decreased from 97.6064 million on June 30, 2023, all the way down to 15.6983 million shares at the end of the first quarter of 2024. The shareholding ratio decreased from 4.56% at that time to 0.8%.

Compared with Ehang Intelligent Innovation, which has made a lot of progress in industrialization, Wanfeng Auto Wheel is indeed a concept stock lifted by the economic trend from beginning to end. Most individual investors without sufficient information to help determine are obsessed with this trend, missing how many daily limit increases. But with an unyielding heart, can they wait a little longer and perhaps still be able to wait?

However, the air is thin at high altitudes, and it is already full of people. As long as there is any movement, it can scare people into a cold sweat!

March 14th, 100,000 retail investors, what will they do?

The tactic of riding the concepts and pulling up the stock price is no longer uncommon in A-shares.

At the end of last year, the short play concept was gaining momentum. Simei Media replied to investors' questions on the Shenzhen Stock Exchange's Interactive Easy platform claiming to "operate Douyin Supermarket on behalf of the company." Later, Douyin denied the claim and exposed it, which was regarded by the market as hype for riding on a hot topic. The company's stock price subsequently fell by a cumulative 25% in the following three days, and the company and its secretary were also investigated and punished by regulatory agencies.

Last September, SuDaWeiGe misled investors when replying to questions about lithography machines on the Shenzhen Stock Exchange's Interactive Easy platform, leading investors to believe that it could produce chip lithography machines, causing a negative impact on the market. The Jiangsu Securities Regulatory Bureau issued a warning to the company and imposed a fine of RMB 1.5 million, and issued a warning to the relevant person in charge with a fine of RMB 1 million.

In recent years, a lot of sexy concept stocks have emerged, such as AI, metaverse, new photovoltaic technologies, sodium-ion batteries, etc. Many listed companies rely on riding hot market concepts to quickly boost stock prices in the interactive platform without high quality information content, and become a fast channel for original shareholders to cash out by selling shares, and even reducing their holdings may not stop the stock price from rising, with a stubborn belief of "you are who you say you are".

Announcements that ride on hot topics do not have high-quality information content and may even constitute false statements. If "riding on a hot topic" information is disseminated through non-statutory information disclosure channels, it may constitute an illegal act of using false or uncertain material information to induce investors to trade securities in violation of securities laws.

However, these just hit investors' soft spots. The feature of market speculation is that it heats up quickly and is easily transmitted. As long as the new topic is intuitive, easily understood, and eye-catching, it is easy to form the "herd behavior of the market. "

Moreover, benchmark leading stocks like Wanfeng Auto Wheel with a large amount of centralized funds can quickly push up the stock price in a short period of time. Those who do the work use these two characteristics to transfer all the chips they absorbed in the early stage to retail investors, and in the end it is the retail investors who suffer.

At present, regulatory attention, inquiry, and punishment have become faster and stricter, and there has been a clear restraining effect on chaos such as "riding a hot topic" and "speculating on concepts." Although it is difficult to completely suppress market speculation behavior, investors should pay more attention to information quality, learn to identify some methods of manipulating stock prices, and focus on the core logic of company performance growth potential.