At the end of October, while there were clear signs of a pullback in the Hong Kong large cap market as a whole, a small cap stock continued to rise abnormally, attracting the attention of many investors.

Looking at historical data, the stock price of sprocomm intel (01401) quietly started rising since the beginning of the month. As of November 5th, the latest stock price has reached around 14 Hong Kong dollars, with an intraday high of 14.66 Hong Kong dollars, representing a 266% increase from the initial 4 Hong Kong dollars in October, hitting a new high since its listing. Calculations show that in just October alone, the stock price surged by nearly 150%.

However, strangely, despite the continuous rise in stock price, the trading volume of the stock has not increased proportionally. The recent volume has been around 10 million shares, and on the 5th, the volume narrowed compared to the previous trading day while the stock price continued to rise. When volume and price do not match, it usually indicates weaker upward momentum in the market, which may encounter significant resistance in the short term. The uncertainty remains whether the stock price can continue to break through to the upside.

On the news front, the major shareholders of the company have repeatedly reduced their holdings in recent times. On September 13th, major shareholder Super New Limited reduced 0.165 billion shares of the company's stock, and on the 27th, the major shareholder Lijian further reduced 0.165 billion shares of the company's stock. After the reduction, Lijian's shareholding decreased from 0.37 billion shares (approximately 37.0% of the company's total issued share capital) to 0.205 billion shares (approximately 20.5% of the company's total issued share capital).

What secrets are hidden behind the continuous month of rising without trading volume for sprocomm intel?

Retail investors have been consistently buying in the past two weeks.

Looking at recent buying and selling data, the largest seller in the past 5 days has been Shin Yongan International, having sold a net of 2.12 million shares by November 4th, far exceeding Hong Kong and Shanghai Banking Corporation (net sold 0.294 million shares), Wise Link (net sold 0.23 million shares), and Bank of China (net sold 0.216 million shares); the top net buyer was Shengheng with 2.12 million shares, followed by Citibank with 0.7473 million shares bought and Kingrich with 0.604 million shares bought, while retail investors from Futu bought 0.334 million shares, increasing their shareholding from 3.06% on September 20th to 5.74% on November 4th.

Notably, as of October 15, Jinli Feng's shareholding ratio was 2.39%. During this period, the company continued to sell off shares, and as of November 4, the shareholding ratio had dropped to 1.46%.

As of 14:00 on November 5, J.P. Morgan and Huili were the major sellers, selling 0.05 million shares and 0.032 million shares respectively. Following them were Zhifu and Yaocai, both selling 0.02 million shares. Huili's shareholding has decreased from the previous 0.27% to 0.24% as of the 4th. On the buying side, Furui ranked first with a net purchase of 0.038 million shares, followed by Yingtu with 0.032 million shares bought, Futu with 0.03 million shares bought, and then Hengsheng and Bank of China International. However, as of the 4th, Yingtu's shareholding was only 0.05%, and Hengsheng's was only 0.1%.

According to the Intelligence Finance App, SPROCOMM INTEL was successfully listed on the main board of the Hong Kong Stock Exchange on November 13, 2019. For over three years after listing, the stock price remained below 2 Hong Kong dollars. In the second half of 2023, the company's stock price once broke through 4 Hong Kong dollars, then entered a quiet period lasting one year.

In recent years, the market has shown a rather tepid response to the stock, possibly due to the company's relatively backward market share, small business scale, and lack of clear financial highlights.

Significant revenue growth in the first half of the year.

Public information shows that Sprocomm Intelligence Limited (referred to as Sprocomm Intel) is a ODM mobile phone supplier focused on emerging markets, mainly engaged in the research, design, manufacture, and sales of mobile phones and the assembly of printed circuit boards for phones. Its products are sold to over 15 countries globally. According to the 2017 data, the company had a market share of 2.6% among domestic ODM mobile phone suppliers, ranking seventh.

According to the recently disclosed 2024 interim report, SPROCOMMINTEL's total revenue in the first half of 2024 reached 1.257 billion yuan, an increase of approximately 55.8% compared to the same period in 2023. The net income was 9.856 million yuan. The company stated that the revenue growth mainly came from the sales of smart phones and IoT-related products.

Looking at the income structure, smart phone revenue increased by 40.8% from 0.568 billion yuan in the first half of 2023 to 0.8 billion yuan in the first half of 2024. Despite a decline in smart phone sales in India, sales growth in the Chinese and American markets drove overall revenue improvement.

According to the report from the global independent analysis institution Canalys, benefiting from the strong demand in emerging economies and the early stage of replacement cycles in North America, China, and Europe markets, the global smart phone shipment volume in the third quarter of 2024 increased by 5% year-on-year, achieving growth for four consecutive quarters.

However, Canalys analyst Zhou Lexuan also pointed out that while market conditions are improving, the momentum of demand recovery remains fragile. Manufacturers are facing increasingly global challenges and regulatory impediments in creating demand, such as the EU's ecodesign directive. Effective supply chain management, maintaining healthy inventory levels, and optimizing sales and marketing investments are becoming increasingly important for manufacturers to consolidate their market leadership.

Looking at the industry data from the third quarter, the global smart phone market continued to be under pressure in the second half of the year. According to the latest research by the TechInsights mobile team, the global smart phone shipment volume in the third quarter of 2024 increased by 3.8% year-on-year, reaching 0.3077 billion units, maintaining a recovery trend for four consecutive quarters. However, compared to the previous three quarters, the growth rate has slowed to single digits.

In the third quarter of the Chinese smart phone market, the shipment volume increased by 3% year-on-year, reaching a total of 65.7 million units, showing a recovery trend for three consecutive quarters. This growth is mainly attributed to the stable replacement cycle on the demand side and the diversified new products launched by manufacturers during the back-to-school season.

From a global perspective, benefiting from the contributions of emerging markets such as Latin America, Asia-Pacific, the Middle East, and Africa, the mobile phone industry is still in an incremental era. There are still many opportunities for cost-effective mid-to-low-end products through international expansion. On the other hand, the AI ​​wave is also driving the industry's trend towards upgrading and transformation. In the coming years, AI smart phones and related ecosystem construction are expected to bring new growth opportunities to the market.