After suffering an "inexplicable sell-off," can Shenzhen Hepalink Pharmaceutical Group (09989) share price move from oversold recovery to a trend rebound?

After touching a stage high of 4,018.32 points on August 26, the Hang Seng Healthcare Index underwent a pullback that lasted more than half a month, and only recently, with a "three consecutive positive closes," has it basically confirmed the start of a new round of rebound. In this round of rebound, the Hong Kong pharmaceutical sector as a whole has diverged. Taking September 18 as an example, on that day, among the relevant constituents of the Hang Seng Healthcare Index, the proportion of rising stocks was about 50.6%. However, as the heparin leader, Shenzhen Hepalink Pharmaceutical Group (09989), not only failed to follow the rise, but instead suffered a round of "inexplicable sell-off" in the market. Stock-specific risk pricing and the "inexplicable sell-off" On September 18, Shenzhen Hepalink Pharmaceutical Group's Hong Kong stock price suddenly closed sharply down 9.51%, staging a typical low-liquidity small-cap sell-off on heavy volume. It was observed that Shenzhen Hepalink Pharmaceutical Group opened that day at HK$4.22, up about 1.6%, after which the company's share price fell all the way. Although no effective rebound was seen afterward, until 2 minutes before the close that day, its share price decline was still maintained at around 5%. Then, 1 minute before the close, Shenzhen Hepalink Pharmaceutical Group's share price was directly smashed to the lowest price of HK$3.76 and closed at the low, leaving it just one step away from the previous stage low of HK$3.74. The one-sided distribution-style bearish candle on heavy volume formed that day directly broke through its previous consolidation platform, and also pushed Shenzhen Hepalink Pharmaceutical Group's Hong Kong stock, whose share price had recently been in a weak trend, into a wave of accelerated bottom-seeking characteristics. However, from a horizontal comparison of the market, apart from the aforementioned Hong Kong pharmaceutical sector being in a new round of rebound, on September 18, the A-share chemical preparations sector likewise did not see panic-style broad declines, and Shenzhen Hepalink Pharmaceutical Group's A-shares also only closed down 1.37% that day. Although its decline was on the weaker side among A-share chemical preparations samples, it was far less extreme than the 9.51% decline in Hong Kong shares. In other words, the "inexplicable sell-off" in Shenzhen Hepalink Pharmaceutical Group's Hong Kong shares this time was not a follow-on decline triggered by abnormal sector movement, but rather more like Shenzhen Hepalink Pharmaceutical Group's H-share risk being "ambushed" and priced in on a concentrated basis. The recently disclosed 26H1 results show that during the reporting period, Shenzhen Hepalink Pharmaceutical Group achieved revenue of RMB 2.580 billion, down 8.44% year on year; net profit attributable to shareholders over the same period was RMB 275 million, down 34.74% year on year. Behind the decline in both revenue and profit was mainly the rapid change in international exchange rates during the reporting period, with obvious depreciation in the currencies of some regions. As a company with a global layout, the group's overseas business is greatly affected by exchange rate fluctuations, putting certain pressure on overall revenue and profit. Moreover, the company disclosed in its financial report that its exchange losses during the reporting period exceeded RMB 155 million, which further dragged down net profit. In addition, Shenzhen Hepalink Pharmaceutical Group stated in its interim report that "the board of directors decided not to distribute an interim dividend," which to a certain extent triggered fluctuations in the sentiment of holders in the market. In fact, even before the interim report was disclosed, both bulls and bears in Shenzhen Hepalink Pharmaceutical Group's Hong Kong stock market had already begun trading "uncertainty" in advance. As a company with a relatively high proportion of overseas revenue, Shenzhen Hepalink Pharmaceutical Group's profit being directly affected by EUR/USD exchange rate fluctuations is an open secret, but before the interim report confirmed the financial data, the market could not confirm the scale of the company's exchange losses for the period. Combined with uncertainty over the delivery pace of CDMO projects on the business side and the inflection point of API prices, this led to trading behavior of "sell certainty first, wait for announcement verification later" staging a small round in Shenzhen Hepalink Pharmaceutical Group before the interim report. From the market action, on August 20, during intraday trading, under the logic of Shenzhen Hepalink Pharmaceutical Group's A-shares hitting the daily limit plus "formulation globalization + pharmaceutical sector sentiment" valuation repair, Shenzhen Hepalink Pharmaceutical Group's H-share price was once pulled up to a high of HK$4.68. However, bulls in the market only lifted Shenzhen Hepalink Pharmaceutical Group's share price out of its previous low-volume weak zone, but did not form a reversal combination of "volume breakout + new OBV high + MACD red bar expansion," and encountered obvious selling pressure at the high. In the end, Shenzhen Hepalink Pharmaceutical Group's Hong Kong stock closed that day at HK$4.53, with the upper shadow accounting for about 52% of the day's amplitude. The next day, Shenzhen Hepalink Pharmaceutical Group's share price reached an intraday high of only HK$4.58, failing to break the previous day's high, and then on August 24 it closed down at HK$4.19, returning to the price range before the August 20 launch. At this point, short-term bulls completely lost the initiative. From August 24 to September 4 afterward, Shenzhen Hepalink Pharmaceutical Group experienced a continuous low-volume slow decline, with off-market buying drying up. Especially after the interim report was disclosed on August 28, market wait-and-see sentiment became even stronger. It was not until September 9 that a wave of oversold technical repair appeared in Shenzhen Hepalink Pharmaceutical Group's market, with the company's share price closing up 3.45% that day. However, due to insufficient rebound volume, it failed to drive the company's share price above the 20-day moving average and give a clear trend reversal signal. Shenzhen Hepalink Pharmaceutical Group's share price weakened again over the next several trading days, and this also became the trigger for its heavy-volume sell-off on September 18. Can southbound funds support the subsequent rebound? As one of the global leaders in enoxaparin sodium formulations, Shenzhen Hepalink Pharmaceutical Group is highly favored by Stock Connect funds. It has been observed that in recent years, Stock Connect funds' shareholding ratio in Shenzhen Hepalink Pharmaceutical Group's H-shares has continued to rise, from about 30% in 2024 to 51.13% now, with the number of shares held reaching 113 million shares, corresponding to a market value of HK$423 million. It is not hard to see that even though Shenzhen Hepalink Pharmaceutical Group's share price recently suffered a heavy-volume sell-off, southbound funds still show willingness to increase holdings. But for Shenzhen Hepalink Pharmaceutical Group, southbound funds' moderate increase in holdings seems somewhat like "a drop in the bucket." First, from the market action, although there were obvious volume increases for two consecutive trading days on September 18 and September 21, this does not mean Shenzhen Hepalink Pharmaceutical Group's share price has reached a reversal point. After forming a long bearish candlestick with no upper or lower shadow on September 18, Shenzhen Hepalink Pharmaceutical Group's closing price the next day was HK$3.88, only slightly above its opening price of HK$3.87. At the same time, the company's share price intraday pulled back from a low of HK$3.85, but the upper shadow was obvious, indicating that there are still trapped positions and short-term profit-taking positions in the range above HK$3.9. Compared with the bullish candle on September 9 that closed at the high, the quality of the bullish candle on September 21 was clearly weaker, and this also indicates that current off-market adding funds are only "stabilization-attempt-type," which is also the current choice of southbound funds. Data show that southbound funds' shareholding ratio in Shenzhen Hepalink Pharmaceutical Group rose from 50.52% on August 25 to 51.14% on September 18, indicating that Stock Connect funds did indeed take on positions when Shenzhen Hepalink Pharmaceutical Group's share price was low. But specifically, the number of shares held by southbound funds this time increased by only about 1.359 million shares, while the market value of holdings fell from about HK$480 million on August 25 to about HK$463 million on September 18, a decrease of about HK$17.2 million. Moreover, when Shenzhen Hepalink Pharmaceutical Group's share price sold off on September 18, its trading volume reached as high as 2.3675 million shares, but southbound funds increased holdings by only about 45,000 shares that day, with the purchase amount accounting for only about 1.9% of Shenzhen Hepalink Pharmaceutical Group's total trading volume that day. To a certain extent, this shows that although southbound funds are willing to take on Shenzhen Hepalink Pharmaceutical Group at low levels, they have not formed the strong accumulation characteristic of "the more it falls, the more they add heavily." Their increase in holdings is more like "passively raising the ratio + left-side exploratory buying." Since Shenzhen Hepalink Pharmaceutical Group's H-share market pricing is currently mainly based on the fundamentals shown in its 26H1 financial report, and the company currently still faces suppressing factors including low API prices, new CDMO clients not yet entering a stage of substantive contribution, and structural exchange rate exposure, these factors may be difficult to fully digest through a short-term technical rebound and further evolve into a new round of trend-based valuation repair.