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

After Dongfang Holdings (002647, stock forum) pulled off a “one-day limit-up/limit-down reversal board” right after opening on December 15 following a run of “14 consecutive daily limit-downs,” it went from limit-down to limit-up in just 39 seconds. As of the close, Dongfang Holdings’ share price was 15.14 yuan per share, with accumulated trading value reaching 3.3B yuan. Before that, its highest daily trading value was only just over 3B yuan.

In response to Dongfang Holdings’ performance that day, opinions in the market varied widely. Some said it was a lifeline for investors from within the margin trading crowd, while others believed investors could take the opportunity to bottom-fish. Others also said it was a cash rescue led by brokerages. When the streak of consecutive limit-downs was paused, how Dongfang Holdings would develop afterward became a topic the market was concerned about.

Did the “board-jumping” succeed?

Since this year began, Dongfang Holdings’ stock price has surged steadily. Before this round of negative news came out, it had gained a cumulative 300%. Afterward, following 14 trading days of limit-downs, its market value evaporated by more than 3.3B yuan. Dongfang Holdings itself is also a margin-trading stock; as of December 14, its margin balance was 1.15B yuan, accounting for 38.9% of its circulating market value. With continued limit-downs, nearly 3 billion yuan of funds had nowhere to go.

On December 15, Dongfang Holdings, which had faced “14 consecutive limit-downs,” rebounded with a daily limit-up. In 39 seconds, it staged a “one-day reversal board”行情 going from limit-down to limit-up. As of now, Dongfang Holdings is priced at 15.14 yuan per share, and accumulated trading value has reached 3.3B yuan.

The龙虎榜 data shows that the top five trading departments bought a combined 681 million yuan that day. Among them, the Guangda Securities (601788, stock forum) Foshan Lujing Road trading department bought 359 million yuan, while the Haitong Securities (600837, stock forum) Shenzhen branch Huarfu Road trading department bought 135 million yuan.

On the same day, five brokerage firms, including BOE International, Caitong Securities, Guangda Securities, Shenwan Hongyuan (000166, stock forum), and Great Wall Securities, had their affiliated trading departments sell a combined 1.149 billion yuan. Among them, BOE International’s Shanghai Xinhua Road trading department sold 330 million yuan, Caitong Securities’ Qingdao branch sold about 227 million yuan, and Guangda Securities’ Shenzhen Keyuan Road trading department sold 192 million yuan.

Regarding Dongfang Holdings’ performance today, the market has been divided, with many saying it was a brokerage-led cash rescue. One netizen even labeled Guangda Securities’ Foshan Lujing Road trading department, whose buy amount exceeded 300 million yuan today, as the “Board-Jumping King.”

Zhou Maohua, a financial market analyst at Guangda Bank, told Caijing at Shell that Dongfang Holdings displayed a limit-up/limit-down reversal pattern, with an extremely high turnover rate and clear signs of a clash of funds.

In his view, it’s not ruled out that some institutions or “speculative funds” bought to stop the bleeding as part of a self-rescue. But whether it can succeed or restore market confidence depends on whether the company makes sufficiently detailed disclosures and whether its operating conditions can stabilize and improve, so that investors can effectively evaluate. “Whether the board-jumping succeeds still depends on whether investors think the stock has already bottomed out.”

After 14 consecutive limit-downs, it drew a focus letter

It’s worth noting that the day before, Dongfang Holdings had just received a regulatory letter.

On December 14, the Shenzhen Stock Exchange sent a letter of inquiry to Dongfang Holdings stating that, regarding media reports that the actual controllers of Dongfang Holdings shareholder Chongzuo Zhongshuo were Wang Shishan, Huang Hao, Liu Changyong, and Shao Mingya, where Wang Shishan, Huang Hao, and Liu Changyong are directors or senior management of the company, it required Dongfang Holdings to conduct a self-check and provide a written explanation.

According to related materials, Chongzuo Zhongshuo was established on October 14, 2019. After Dongfang Holdings’ surge before the fourth quarter of 2019, it began making large-scale purchases and first entered the top ten circulating shareholders list of Dongfang Holdings. By the end of the third quarter, Chongzuo Zhongshuo held 3.55% of Dongfang Holdings’ shares, making it the sixth-largest circulating shareholder.

On December 15, in an abnormal movement announcement released by the Shenzhen Stock Exchange, Dongfang Holdings stated that there were no items in the information previously disclosed by the company that required correction or supplementary disclosure. It also said that on November 18, its controlling shareholder was formally changed to Beijing Dongfang Information Technology Co., Ltd., and its actual controller was changed to Huo Dong.

The company said it had not found any undisclosed major information recently reported by public media that might or had already had a significant impact on the company’s stock trading price; the company’s current operating situation and internal and external operating environment have not undergone any major changes; after asking the company’s management, controlling shareholder, and actual controller, there are no major matters that the company should disclose but has not disclosed, nor any major matters in the planning stage; during abnormal stock price fluctuations, the company’s controlling shareholder and actual controller did not buy or sell the company’s stock; and there is no situation in which the company violated fair information disclosure requirements.

Although many in the industry pointed out that Dongfang Holdings is clearly a heavily controlled stock, others also said there are suspicions of price manipulation by the controller. As of now, however, it has not yet been publicly confirmed.

Can Dongfang Holdings’ stock price take off from here?

By the close, Dongfang Holdings saw total trading of 3.303 billion yuan for the full day, with a turnover rate as high as 44.58%. Among the trading, there are funds that fled from the margin-trading positions.

Besides continuous outflows, many also entered. Judging from intraday trading data, near the limit-up board, Dongfang Holdings attracted a large number of small orders. One retail investor said, “I chased in at the limit-up today; I can at least get out after a cut in half—then I’ll come back to pick up;” Another said, “I bought 500 shares—I don’t know if it will be safe tomorrow.” Others regretted, “I didn’t buy today—so sad!”

After it staged a limit-up行情, can Dongfang Holdings’ stock price really take off from here? In fact, there is plenty of controversy over the stock’s subsequent performance. Zhou Maohua also said that with such a high turnover rate, the market has major differences over its future direction.

Those who are bearish are not few either. Some investors seized the chance to exit to reduce losses, thinking, “Tomorrow is another escape race.” Others took on the image of “suicide squad” participants, hoping to take the opportunity to bottom-fish and turn things around. Still, some investors said, “If you went in today and got stuck, you can’t blame the market and other people anymore.”

Regarding the company’s future development, Zhou Maohua said that with a lack of fundamental support, fierce fund games leading to sharp volatility, and on top of that the market’s overall risk appetite for year-end being somewhat more restrained, there are still uncertain factors in the future direction.

Xinjing News Shell Finance reporter Hu Meng Editor Zhao Ze Proofreader Yang Xuli

(Editor: Ji Liya HN003）

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