Produced by |Metal Finance
Writing | Chuck
When the impact of trillion-dollar market value becomes the standard target of Internet listed companies, the short-selling behavior of this industry based on "imagination space" is often regarded as a "taboo game".
On the first trading day when Aauto Quicker (1024.HK), the "first short video stock", was born with a trillion-dollar market value, on February 5th, its share price opened with an increase of 193.91%, and it surpassed JD.COM (9618.HK) to become the fourth largest Internet company in China with a market value of HK$ 1.39 trillion.
However, as Aauto Quicker’s stock price went up to HK$ 345/share, the decline continued throughout the day, and its closing price was finally fixed at HK$ 300/share, and its market value dropped to HK$ 123 million, with the largest daily market value evaporation exceeding HK$ 180 billion. Although the company’s short-selling ratio was as low as 1.036% that day, the short-sellers who were waiting for the opportunity also smelled the opportunity to share the feast.
On February 8th, Aauto Quicker’s short-selling ratio soared to 10.159% on the second trading day of listing. The warming of bearish sentiment also caused its share price to drop to HK$ 283/share, and the closing price of the day rose by only 1%. In the following two trading days, under the "catalysis" of the sustained efforts of long-term funds, the motivation of short sellers to increase their positions was crushed. Aauto Quicker’s short-selling ratio dropped to 3.817%, and its share price climbed to HK$ 398/share, surpassing (3968.HK) as the sixth largest listed company with a market value of 1.65 trillion.
However, the "game" may have just begun. You know, as one of the few companies in the history of the Aauto Quicker Stock Exchange that were included in the short-selling securities on the first day of listing, also gave short sellers more time to break the "taboo".
Wind shows that as of February 10, 2021, among the 2,545 listed companies on the Hong Kong Stock Exchange, the number of listed companies that can carry out short-selling transactions is 706 (excluding delisting companies and stocks that have been eliminated), accounting for nearly 30%. Among them, the number of companies that have been included in the ranks of short-selling securities in the past decade has reached as many as 438, accounting for 62.04% of the total number of short-selling listed companies.
It is worth noting that 49 companies became short-selling securities on the same day as Aauto Quicker, and this data has set a new record for the HKEx in recent ten years.
In the past ten years, 10 bull stocks have been born out of 438 short-selling securities, which have increased by more than 10 times, namely Shunyu Optical Technology (2382.HK), Yihai International (1579.HK), Evergrande Automobile (0708.HK), Sunac China (1918.HK), China Aoyuan (3883.HK), Electronics (0285.HK), Yadi Holdings (1585.HK) and Kangxinuo Bio-B (6185.HK).
Among them, Shunyu Optical Technology, which was included in the short-selling securities on November 9, 2017, became the most "bull" target among the short-selling stocks with a cumulative increase of 4,723.41%.
However, as an optical leading stock with triple concept stocks of Apple industry chain, new energy automobile industry chain and Huawei industry chain, Shunyu Optical Technology has hit record highs since this year. Nomura, HSBC and other institutions believe that its positive factors have been fully reflected in the stock price and its attractiveness to investors has declined, so the company’s rating and target price have been lowered one after another. During the high consolidation period of Shunyu Optical Technology’s share price, the company’s short-selling ratio also continued to rise, ranking second in the short-selling ratio of short-selling securities in the industry.
Kangxinuo Bio -B, Evergrande Automobile and Yihai International are the three companies that have been included in the short-selling securities sector for the shortest time in the increase list, with increases of 1207.82%, 3568.75% and 4335.65% respectively.
There are 13 listed companies that have been included in short-selling securities, and the top two are Fengsheng Holdings (0607.HK), which was deeply in debt crisis in 2018, and Zhuoer Zhilian (2098.HK), the former core listed company under Yan Zhiqi, the richest man in Hubei. The time when they were included in short-selling securities was February 10, 2017 and August 11, 2017, respectively, with a decrease of 95.30% and 87.83%.
In recent years, this pair of he is my brother, which hold shares with each other, not only suffered losses in successive years, but also both became "fairy stocks" with light transactions, with the latest market value of only HK$ 3.1 billion and HK$ 7.3 billion respectively.
Another pair of closely related companies in the decline list are CAR Inc. (0699.HK), the core asset of Lu Zhengyao’s "Shenzhou Department", and Legend Holdings (3396.HK), the core holding platform of Lenovo Department, which are ranked 9th and 11th on the list with 65.22% and 63.93% respectively.
The latest news shows that South Korean private equity giant Ambokai has officially launched a premium privatization offer for CAR Inc.. This also means that 10 months after Luckin coffee’s financial fraud, Legend Holdings, as the largest shareholder in CAR Inc., will also draw a sentence on the tortuous road of cutting with the "Shenzhou Department".
If there is no real unicorn in the ten-year decline list, then if the time after being included in the short-selling securities is shortened, the "taboo game" has been staged on today’s giants many times.
Among them, Ali Health (0241.HK) and Meituan (3690.HK) ranked 9th and 10th respectively in the list of stock price decline in the first month after being included in the short-selling securities, with a decrease of 24.74% and 24.29% respectively. They were included in the short-selling securities on February 10th, 2017 and September 20th, 2018 respectively. However, since then, with the share price increase of 605.26% and 492.43%, the latest market value of Ali Health and Meituan has reached HK$ 360.6 billion and HK$ 2.53 trillion respectively.
The "giants" in the "first quarter decline list" are (1776.HK), wan chau international (0288.HK), Meituan, China Unicom (3969.HK) and Red Star (1528.HK). Among them, the decline of Meituan has expanded to 38.27% since it was included in short-selling securities;
The "giants" on the "semi-annual decline list" are (2607.HK), Xiaomi (1810.HK) and Chow Tai Fook (1929.HK), all of which fell by nearly 40% in the same period; The worst target on the "Annual Decline List" belongs to Zhongan Online (6060.HK), the leading internet insurance company, which was praised by many stars, with a drop of over 60% in the same period.
On the whole, among the 438 short-selling securities, whether it is the "unicorn" defined by the capital market or the "pseudo-giant" with hidden dangers of mine explosion, they all face a decline probability of nearly 50% in different periods. For Aauto Quicker, which was included in the short-selling securities sector on the first day of listing, whether it will repeat the mistakes of its predecessors in the first year of its trillion-dollar market capitalization journey, or whether it will break the "routine" and continue its upward trend is worthy of continuous attention.