On May 19th, China Finance International (00721.HK) resumed trading after a prolonged suspension, experiencing a dramatic surge in its share price. At one point, the stock price soared by over 1,100%, though it later dropped significantly. As of the time of publication, the stock still showed a 285% increase, with trading volume also witnessing a substantial rise, indicating clear abnormal movements.
Company Overview and Business Segments
China Finance International is an investment holding company primarily engaged in equity investment activities. The company operates through four main divisions. The microcredit service division focuses on equity investments in microcredit service providers. The real estate and natural gas division is involved in equity investments in real estate and natural gas businesses. The Clean Energy division targets equity investments in the clean energy industry. Additionally, the company also engages in equity investments in guarantee services, production of aluminum alloy strips and foils, product processing, and management consulting services, among other businesses.
Suspension and Resumption of Trading
On October 3, 2023, China Finance International announced that it would delay the release of its full-year 2023 results. As a result, in accordance with regulatory requirements, the company’s shares were suspended from trading on the Hong Kong Stock Exchange starting from October 3, 2023. The full-year results for 2023 were eventually published on January 2, 2024. However, the previous auditor was unable to obtain sufficient and appropriate audit evidence regarding the nature and reasons for prepayments and receivables, as well as the judgments, assumptions, and estimates used by management in assessing impairment. This led to the continued suspension of trading until the company met the resumption guidelines, fully complied with the listing rules, and satisfied the Hong Kong Stock Exchange.
Resumption of Trading and Market Reaction
On May 16, 2025, China Finance International announced that it had met and received acceptance from the Hong Kong Stock Exchange for all the guidelines required for the resumption of trading. The company’s shares resumed trading at 9:00 a.m. on May 19, 2025. The sharp rise in the stock price on the day of resumption was largely influenced by this news.
Recent Performance and Financial Data
It is important to note that China Finance International’s latest financial performance has been less than stellar. Data indicates that in the first half of the fiscal year 2025 (ending December 2024), the company’s revenue stood at HK$164,000, with profit attributable to shareholders amounting to HK$1.641 million, representing a year-on-year decrease of 97.6%. This significant decline in profitability raises questions about the company’s long-term prospects and the sustainability of its recent stock price surge.
Caution Amid Market Volatility
The sharp price fluctuations experienced by China Finance International upon resuming trading highlight the volatility and potential risks associated with investing in companies that have faced regulatory and financial challenges. While the resumption of trading and the initial surge in share price may attract attention, investors should carefully consider the company’s recent financial performance and the underlying reasons for its previous suspension. The significant drop in profitability suggests that further due diligence is necessary before making investment decisions.
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