Before the ban on Hong Feng was lifted, the stock price had already broken 70%. There is no “answer” to the question (02438) when you go out and ask (02438)?

Facing the “Hong Kong Stock AIGC First Stock” listing, I asked (02438). After less than half a year of listing, the stock price had “lost its color”.

Going back in history, I went out to ask questions and successfully “listed” on Hong Kong stocks on April 24 this year. Despite being oversubscribed by 117.39 times during the global distribution and placement period, a good start was clearly not enough to give people peace of mind when going out and asking. Open the K-line chart. The issue price for the outing question was HK$3.8. On May 3, it hit HK$4.38 in the Outbound Questionnaire market, setting a new phased high in stock prices. However, investors who hold shares were too late to celebrate. The stock price when they went out to ask about it on the next trading day turned downward and fell to HK$0.66 in the intraday period on September 11.

Perhaps thanks to the stronger bullish atmosphere in the Hong Kong stock market at the end of September, the stock rose continuously from September 19 to October 4. During this period, the stock rose by more than 210%. However, as the upward trend in the market was interrupted in recent trading days, the increase from going out to ask came to an abrupt end, and the stock had a cumulative correction of 40% in the past 5 trading days. By the close of trading on October 14, the door-to-door inquiry was HK$1.3, down 65.8% from the issue price.

Also, it is worth noting that going out and asking questions will soon usher in a “wave of lifting the ban” on October 24, eight trading days later. At that time, the ban on a total of 24.925 million shares held by the company's two cornerstone investors, Zhongguancun International Co., Ltd. and Nanjing Economic Development Investment Partnership (limited partnership) will be lifted. At the same time, the ban on 876 million shares and 69.162,000 shares held by investors and the remaining existing shareholders before the initial public offering will also be lifted. The corresponding company's total share capital ratio is 58.76% and 4.69%.

Looking at the shareholder list, not only did it introduce the cornerstone of the state-owned assets framework, but the company had already accepted investment from investment banks and companies including Sequoia China, Zhenge Fund, SIG Haina Asia, Google, Yuanmei Optoelectronics, and Goertek Co., Ltd. even before listing. Although the lineup of investors is huge, considering that the stock price trend was sluggish for most of the time after going public, it is true that there may be institutions on the above list that are still profitable because they participated in the round earlier, but the number of investors currently losing money is probably higher. As the stock price ban is lifted, whether these institutions will hold shares to rise or leave the market decisively is worth investors' continued attention.

What do AI “star stocks” rely on to impress the market?

Founded in 2012, Go Out and Ask is an AI company founded by Li Zhifei, a former Google scientist. According to the prospectus, Go Out and Ask uses generative AI and voice interaction technology as the core to provide AI-generated content (AIGC) solutions, AI enterprise solutions, smart devices and accessories. Also, according to public information, the self-built big model “Sequence Monkey”, which is a large self-built model that can understand and generate human-like text, audio, images, and videos. At the same time, the company has also developed AIGC products such as “Magic Sound Workshop,” “DuPdub,” “Wonderful Yuan,” and “Wonderful Question.”

According to the Insight Consulting Report, in terms of revenue from AIGC products and services, Outbound Inquiries ranked first in the country in 2022. There is no doubt that “AIGC's first share” is the biggest selling point when you go out and ask about entering the Hong Kong stock market.

Thanks to ChatGPT's “overnight popularity”, the AIGC industry has advanced rapidly in the past two years, reflecting on the domestic capital market, and related concept stocks are also highly sought after. It was with this “Dongfeng” that, after more than ten years of sharpening their skills, Quan Quan entered the capital market as desired, and successfully introduced two major local state-owned assets as cornerstone investors on the eve of the listing.

Although it is on the cusp of AIGC, which is regarded as a long-term track, it seems that the results of going out and asking are still a long way from being realized, at least at this stage. According to the company's interim results, during the 24H1 period, revenue from going out to ask was 163 million yuan (RMB, same unit), a year-on-year decrease of 37.9%; net profit was -579 million yuan, a significant increase from -218 million yuan in the same period last year.

In the interim report, I went out and asked that it is unswervingly implementing the TOSMB/TOPC business model, and vowed that this model is “an AIGC path that can truly make a profit.” However, in the face of the fundamentals where losses are still growing, the confidence of investors in the secondary market may have already been exhausted.

Also, looking at the trading level, if you expand your gaze to the global capital market, the US stock “Seven Sisters of Technology”, the standard-bearer of this round of AI stock market, has already shown fatigue. Among them, the representative company Nvidia has not reached a new high in stock prices for almost 4 months. Leading stocks are still showing signs of stopping. If companies like going out and asking about them want to regain their rising stock prices, I'm afraid they will need solid fundamentals or strong news incentives.

Is the pressure on stock prices difficult to overcome when the “wave of ban lifting” hits?

Market speculation about stocks in the direction of pan-AI has cooled down, and the performance of related targets, especially application companies, is generally far from fulfilling expectations. It's no wonder that stock price management hubs that go out and ask questions after listing have stepped down.

It should be pointed out that at the time of the IPO, 84.568 million shares were sold globally, accounting for only about 5.6% of the total share capital. This is a typical “crooked” IPO (scaled down offering). According to our understanding, companies may be driven by various factors, including creating exit conditions for the shareholders of the investment institutions behind them, declining market activity, and the company's desire to ensure the steady development of the core business.

As far as asking questions is concerned, reducing circulation through a “dumb version” of the IPO is beneficial to maintaining stable valuations when the company received a high level of attention in the early stages of listing. However, even though the company is keen to “insure the price,” looking back, the stock price trend that you asked about when you went out to ask is still a sharp decline.

The clock turned to the end of September, probably due to the strengthening of the bullish market atmosphere, the increase in investors' risk appetite, and a sharp rise in going out to ask questions. The biggest increase in the company's stock price was over 210% in just over ten trading days. Recently, however, as the rise in the general market has slowed, there has also been a sudden change in the stock price trend. Up to now, the company's current price has shrunk sharply from the October 7 intraday high of HK$2.25, which is far different from the issue price.

Nearly 70%, and I'm afraid the performance of going out to ask questions will disappoint the star institutions and well-known companies that stand behind the company. As a company that received a lot of attention even before it went public, it received 7 rounds of financing throughout the pre-listing process, and the capital covered not only domestic and foreign investment funds such as SIG Haina Asia, Sequoia China, and Zhenge Fund, but also companies such as Google, Goertek, and Yuanmei Optoelectronics.

Admittedly, multiple rounds of financing provided the capital necessary for growth in the early stages of going out and inquiring, but now, as the IPO ban is being lifted, the next trend of these institutional investors is expected to have a significant impact on the future trend of the company's stock price.

The Zhitong Finance App learned that two institutions, Sequoia and Zhenge, invested as early as the angel round stage and went out to ask questions. In addition, SIG Haina Asia and Google, the company's founder Li Zhifei's old owner, have also been “accompanying” the company for many years. The comprehensive cost of these early entrants is relatively low, and they may have a “safety pad” to cash out, but the book profits of more institutions that later are probably already negative. At the same time, it is important to be wary that the total shareholding ratio of institutions that invested before the public sale plus cornerstone investors reached 60%. As the share ban is lifted, will these institutions sell chips or hold shares to rise? Obviously, these two completely different choices will also have completely opposite effects on the future market trend of the company's stock price.

Finally, as far as growth prospects are concerned, AIGC, the core business that is being asked about, will probably still be one of the areas receiving the most capital attention for a long time to come, but due to high costs and difficult profits, this circuit is still full of challenges for the world's largest technology companies, and it goes without saying how difficult it is for small and medium-sized enterprises with limited resources, scarce capital, and no obvious technical advantages to break through. In the meantime, no one can give an exact answer right now about how likely it is to go out and ask what the chances are. Precisely because of this, when investors' risk appetite has not been completely fixed, it is probably not easy to go out and ask if they want to win the favor of capital.