Many stocks have plummeted in the Hong Kong stock market recently. One of them, China's "Tianrui Cement" with a market capitalization of tens of billions, plummeted from a share value of HK$5 to HK$0.048 within 15 minutes before the closing of yesterday (9). More than 99%.
The market value evaporated by HK$14.548 billion (approximately NT$59.7 billion) in a single day, setting a historical miracle in the Hong Kong stock market. Netizens also ridiculed that it turns out that RugPull is not only in the crypto, but traditional finance cannot escape it.
What’s the reason for the plunge in Tianrui Cement’s share price?
At present, "Tianrui Cement" company has issued an announcement this morning saying that it will temporarily stop trading in related stocks. However, there is still no clear official explanation of the reason for the rapid collapse of the stock price. Only Chinese media quoted a staff member of the parent company Tianrui Group as saying: "Currently production and operations are normal, and we do not know the reason for the sudden drop in the stock price." This is shocking.
Hong Kong brokerage analysts said:
"The stock price plummeted 99%. It is most likely that the stock was pledged and the brokerage demanded a margin call. The pledger did not have enough collateral to cover the position, so the brokerage liquidated the position."
Prior to this, Tianrui Cement announced its 2023 results at the beginning of this month. Revenue fell 28.6% to RMB 7.88 billion ; the full-year loss was RMB 634 million, and the loss per share was RMB 0.22.
At that time, Tianrui Cement said that China's real estate market will continue to adjust at the bottom in 2023, and the total demand for the cement industry will continue to decline. Market competition will intensify, product prices will be under pressure, and the cost of raw materials will rise, severely squeezing the company's profits.
"Tianrui Cement" is one of the key enterprises supported by the state
According to the official website of Tianrui Group, Tianrui Cement belongs to China Tianrui Group Cement Co., Ltd. (1252.HK), a subsidiary of Tianrui Group, a Fortune 500 enterprise in China, which is listed in Hong Kong. It was established in 2,000 and is mainly engaged in limestone mining and utilization and clinker, Production and sales of building materials products such as cement and building aggregates.
The company is the leading clinker cement manufacturer in Henan and Liaoning provinces, and one of the 12 national large-scale cement enterprises (groups) supported by the state. Its business is distributed in Henan, Liaoning, Anhui, Tianjin and other provinces and cities. It was listed on the Hong Kong Main Board on December 23, 2011. In 2021, it ranked seventh among China's listed cement companies in terms of comprehensive strength.
The sudden collapse of the stock price is enough to give a glimpse of the severe environment facing China's real estate industry.
