Shares in a mysterious HK investment company have jumped 8,500pct in 5 years, and no one really knows why

25-Feb-2019 Intellasia | Green Wich Time | 6:00 AM Print This Post

Investors in Hong Kong are baffled by the wild success of the share price of a loss-making investment firm in the city-state that has seen its stock increase by close to 9,000 percent in recent years, seemingly without a catalyst.

Shares in China Ding Yi Feng Holdings Ltd, an investment holding company based in the International Commerce Centre, Hong Kong’s tallest building, have rallied 8,563 percent in the past five years, according to a report from Bloomberg on Friday.

For reference, shares in Amazon have risen about 340 percent in the past five years, while Apple has seen its stock increase 125 percent.

The wild gains of the Chinese firm have some scratching their heads. “Fundamentals do not support the stock’s rally at all,” Li Yuanrong, a managing director of the Shenzhen-based venture-capital firm 20VC, told Bloomberg.

The company has reportedly nursed losses for seven of the past eight years.

China Ding Yi Feng is headed by its chair, Sui Guangyi, a figure described as having “investing skills on par with Warren Buffett and George Soros.” Company literature describes Sui as a “legendary figure” and an “influential scholar,” Bloomberg said. He owns about 16 percent of the company’s outstanding shares, worth somewhere in the region of $600 million.

Given the size of China Ding Yi Feng, which has a market capitalisation of roughly 31 billion Hong Kong dollars, or $4 billion, it is now included in several indexes put together by the MSCI, meaning that many huge investment funds like BlackRock and Vanguard have stakes in the company, Bloomberg said.

Hong Kong’s stock market is no stranger to wild, unexplained occurrences, and in January investors were left scratching their heads when several Hong Kong-listed companies plunged on a Thursday afternoon, some losing as much as 80 percent of their value, seemingly with no explanation.

Jiayuan, a property developer, was the worst affected by the crash, dropping as much as 81 percent and seeing more than 25 billion Hong Kong dollars, or $3.2 billion, wiped from its market capitalisation in a single afternoon.


Category: Hong Kong

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