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Investors in Hong Kong are bewildered by the resounding success of the share price of a loss-making investment company of the city-state, which has seen its stock increase by nearly 9,000% these last years, apparently without catalyst.
Shares in China Ding Yi Feng Holdings Ltd., a holding company based at the International Commerce Center, Hong Kong's tallest building, has grown by 8,563 percent over the past five years, according to a report released Friday by Bloomberg.
Here is the table:
For reference, Amazon's shares have risen by about 340% over the last five years, while Apple's shares have increased by 125%.
The wild gains of the Chinese firm have some scratching their heads. "The fundamentals do not support the recovery of stocks at all," Li Yuanrong, general manager of the 20VC-based Shenzhen-based venture capital firm, told Bloomberg.
The company has reported losses for seven of the last eight years.
Read more:A group of shares in Hong Kong has collapsed to 70% without warning – and no one really knows why
China Ding Yi Feng is led by its chairman, Sui Guangyi, a skilled personality of "investing in investment skills tied with Warren Buffett and George Soros". The company's literature describes Sui as a "legendary figure" and an "influential scholar," Bloomberg said. It holds approximately 16% of the outstanding shares of the company, worth around $ 600 million.
Given the size of China, Ding Yi Feng, which has a market capitalization of about 31 billion Hong Kong dollars, or $ 4 billion, it is now included in several indices set up by the MSCI This means that many huge investment funds like BlackRock and Vanguard have stakes in the company, Bloomberg said.
The Hong Kong stock market is no stranger to wild and unexplained events. In January, investors were shaken when several companies listed on the Hong Kong Stock Exchange plunged Thursday afternoon, some losing up to 80% of their value, apparently without any explanation. .
Jiayuan, a real estate developer, was the most affected by the crash, recording a fall of 81% and more than 25 billion dollars from Hong Kong, or $ 3.2 billion, stricken from its market capitalization in an afternoon .
You can read the full story of Bloomberg about China Ding Yi Feng Holdings here.
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