39-second trading halt, after 14 consecutive declines, will Rendong Holdings' stock price restart?

RenDong Holding (002647, Stock Forum), which had suffered “14 consecutive limit-downs,” staged a “limit-up after trading from limit-down” at the opening on December 15—taking just 39 seconds to move from a limit-down to a limit-up. By the close of trading, RenDong Holding quoted 15.14 yuan per share, with accumulated trading value reaching 3.303 billion yuan. Previously, its highest daily trading value was only a little over 20 million yuan.

In response to RenDong Holding’s performance that day, opinions in the market were divided. Some said this was a lifeline for investors within the margin financing trades, while others believed investors could take the opportunity to buy the dip. Still others said this was a self-rescue operation led by securities firms. As the consecutive limit-downs were effectively paused, how RenDong Holding would develop afterward became a topic of concern for the market.

Did the stock “jockey” on the board successfully?

Since the beginning of this year, RenDong Holding’s stock price has been rising strongly. Before this batch of negative news came out, it had already gained 300% in total. After then experiencing 14 trading days of limit-downs, its market value evaporated by more than 200 billion yuan. Moreover, RenDong Holding itself is a margin-financing target. As of December 14, RenDong Holding’s financing balance was 2.997 billion yuan, accounting for 38.9% of the circulating market value. Under continued limit-downs, nearly 3 billion yuan had nowhere to go.

On December 15, RenDong Holding, which had suffered “14 consecutive limit-downs,” rebounded to a limit-up. Within 39 seconds, it played out a “limit-up after trading from limit-down” (“dǐ-tiān bǎn”)行情. As of now, RenDong Holding quotes 15.14 yuan per share, with accumulated trading value reaching 3.303 billion yuan.

The龙虎榜 (top-five buy/sell trading) data shows that on that day, the top five trading departments in total bought 681 million yuan. Among them, the Guangfa Securities (601788, Stock Forum) Foshan Lujing Road business department bought 359 million yuan, and the Haitong Securities (600837, Stock Forum) Shenzhen branch Huafu Road business department bought 135 million yuan.

On the same day, five securities firms, including Bank of China International, Caitong Securities, Guangfa Securities, Shenwan Hongyuan (000166, Stock Forum), Great Wall Securities, and others, sold a combined total of 1.149 billion yuan through their trading departments. Among them, Bank of China International Shanghai Xinhua Road business department sold 330 million yuan, Caitong Securities Qingdao branch sold about 227 million yuan, and Guangfa Securities Shenzhen Keyuan Road business department sold 192 million yuan.

Regarding RenDong Holding’s performance today, the market remained sharply divided. Many said this was a self-rescue of funds led by securities firms, and one netizen even referred to the Guangfa Securities Foshan Lujing Road business department—which had buy amounts exceeding 300 million yuan today—as the “jockey king.”

Zhou Maohua, an analyst with the financial markets at Bank of China, told the reporter of Shell Finance and Economics that RenDong Holding showed a天地板 (limit-up after trading from limit-down) pattern, with an extremely high turnover rate and clear signs of a tug-of-war among funds.

In his view, it cannot be ruled out that some institutions or “hot money” bought to stop the decline out of self-rescue motives. But whether it can succeed—or whether it can restore market confidence in it—depends on whether the company fully discloses information and whether its operating conditions can stabilize and improve, so that investors can evaluate effectively. “Whether the ‘jockey’ is successful still depends on whether investors think the stock has already bottomed out.”

After 14 consecutive limit-downs, it then received an inquiry letter

It is worth noting that the day before, RenDong Holding had only received a regulatory letter.

On December 14, the Shenzhen Stock Exchange issued an inquiry letter to RenDong Holding stating that, regarding the actual controller of the shareholder Chongzuo Zhongshuo (as referred to in media reports) being Wang Shishan, Huang Hao, Liu Changyong, and Shao Mingya, among them Wang Shishan, Huang Hao, and Liu Changyong are directors or senior management personnel of the company; the company was required to conduct a self-check and provide a written explanation.

Relevant materials show that Chongzuo Zhongshuo was established on October 14, 2019. Before RenDong Holding’s surge, starting in the fourth quarter of 2019 it began large-scale purchases, and it first entered the top ten list of circulating shareholders of RenDong Holding. As of the end of the third quarter, Chongzuo Zhongshuo held 3.55% of RenDong Holding’s shares, making it the company’s sixth-largest circulating shareholder.

On December 15, an announcement of abnormal trading published by the Shenzhen Stock Exchange showed that RenDong Holding stated there were no matters requiring correction or additional disclosure regarding information previously disclosed by the company, and it said that the controlling shareholder was officially changed to Beijing RenDong Information Technology Co., Ltd. on November 18, and the actual controller was changed to Huo Dong.

The company said it did not find any undisclosed material information in recent public media reports that may or has already had a major impact on the company’s stock trading price. The company’s current operating situation and internal and external operating environment had not undergone any significant changes. After asking the company’s management, controlling shareholder, and actual controller, it found no major matters that the company should have disclosed but did not, nor any major matters that are in the planning stage. During the period of abnormal stock price movements, the company’s controlling shareholder and actual controller did not buy or sell the company’s stock. The company also has no situation violating the requirements for fair information disclosure.

Although many insiders pointed out that RenDong Holding is obviously a “managed stock,” and some also said there may be suspicions of price manipulation by the controlling party, as of now it has not been publicly confirmed.

Can RenDong Holding’s stock price take off from here?

By the close of trading, RenDong Holding completed trades worth 3.303 billion yuan for the full day, with a turnover rate as high as 44.58%. Among this, there was no shortage of funds that escaped from the margin-financing trades.

Besides continuous outflows, many people also entered. Judging from intraday trading data, near the limit-up board RenDong Holding attracted many small orders. One retail investor said, “Chasing the limit-up today—at least you can only get out after a halving; then you can come back to pick it up.” Another investor said, “I bought 500 shares—I don’t know if I can be safe tomorrow.” There were also investors who regretted it, saying, “I didn’t buy today—so unlucky!”

After today’s limit-up performance, will RenDong Holding’s stock price take off from here? In fact, there is still intense controversy among everyone about its subsequent performance. Zhou Maohua also said that with such a high turnover rate, the market has major differences in views about its future trend.

There are also plenty of people who are bearish. Some investors take the opportunity to exit to reduce losses, believing, “Tomorrow is another race to run.” Others play the role of a “suicide squad,” hoping to take the opportunity to buy the dip and stage a reversal. Still other investors said, “Those who got stuck after entering today can’t blame the market and other people anymore.”

Regarding RenDong Holding’s future development, Zhou Maohua said there is a lack of fundamental support. Under the fierce contest of funds, there is violent volatility. Combined with the fact that the market’s overall risk appetite has somewhat tightened toward year-end, there are uncertainty factors in the outlook.

Beijing News Shell Finance and Economics reporter Hu Meng | Editor Zhao Ze | Proofreader Yang Xuli

（责任编辑：季丽亚 HN003）