After being kicked out of the Hong Kong Stock Connect, KINTOR PHARMA-B (09939), a beauty company, found its direction for valuation growth and saw its stock price soar by over 150%.

After three consecutive years of decline in stock price, KINTOR PHARMA-B (09939) seems to have found a way out of the maze in 2025. It is observed that the stock price of KINTOR PHARMA-B has risen by 156.70% since the beginning of the year. However, unlike other innovative drug targets whose stock prices surged in the first half of this year, due to being removed from the Hong Kong stock connect list in March last year, the stock price of KINTOR PHARMA-B plummeted significantly. Even though the stock price rebounded last year due to the "924 market" in Hong Kong, the annual decline still exceeded 40%. Meanwhile, KINTOR PHARMA-B has also been stuck in the long-term problem of insufficient liquidity for small-cap companies, with the daily average trading volume of its stock below 1 million shares at the beginning of this year. As a result, the stock price of KINTOR PHARMA-B this year has shown significant fluctuations. The price increase mainly occurred in February, March, May, and July, with corresponding price increases of 24.72%, 17.12%, 20.00%, and 66.23%. Compared to the "rise-fall-consolidation" cycle in February, March, and May, the continuous surge in July has attracted more attention from market investors. On the other hand, despite being removed from the Hong Kong stock connect, the stock holdings by Hong Kong investors are still above 20%. The concentration of the stock price increase for KINTOR PHARMA-B may trigger a short-term selling pressure by Hong Kong investors, which is also an issue that investors need to pay attention to. The issue of liquidity pressure in the Hong Kong stock market has long existed, especially for small-cap companies facing long-term liquidity problems. Once a company fails to enter or is removed from the Hong Kong stock connect list, losing the support of southbound funds, its liquidity may face pressure. Since being removed from the Hong Kong stock connect list in March last year, the stock price of KINTOR PHARMA-B has experienced a significant decline. It can be observed that for the 27 stocks removed from the Hong Kong stock connect list in March last year, the average price fell by 24% from March 4th to March 28th, with an average trading volume shrinkage of 52%. Specifically, KINTOR PHARMA-B saw a 12.21% drop in stock price on the first day it was removed, with a cumulative decline of 34.35% in the interval, exceeding the average; during this period, the trading volume shrank by 89% compared to before removal, also exceeding the average. According to the rules, after a company is removed from the Hong Kong stock connect, mainland investors cannot buy shares and can only sell the shares they hold. This means that as the company is removed from the Hong Kong stock connect, mainland investors not only cannot provide liquidity, but they may also become a source of selling pressure. It can be seen that the proportion of holdings by Hong Kong investors for KINTOR PHARMA-B was around 35% in March last year, and this proportion continued to decline until it slightly stabilized after a 1.20% decrease on March 25th this year, leaving the proportion at 24.16%. In the following three months, although the stock price of KINTOR PHARMA-B also experienced periodic increases, during the Hong Kong stock innovative drug market phase, combined with a period of consolidation instead of upward movement for KINTOR PHARMA-B, the selling pressure from Hong Kong investors was not significant. Until June 30th, the Hong Kong investor holdings were still at 22.20%. However, from the chip distribution chart, as the stock price of KINTOR PHARMA-B continued to rise for several consecutive days in July, the peak of the chips has dropped below the support level of 1.58 Hong Kong dollars. It can be seen that with a large amount of bottom-fishing funds, a significant profit-taking area has been formed in the short term, with over 70% of the chips concentrated between 1.24-2.36 Hong Kong dollars, leading to a profit ratio of 88.98%. Furthermore, there were no significant peaks in the chip distribution chart between the cost line and resistance level, indicating that from a technical perspective, there may not be significant resistance to further share price increases for KINTOR PHARMA-B. However, it should not be ignored that the stock price of KINTOR PHARMA-B has been running along the upper Bollinger band for several consecutive days in the short term, and the price increase from the beginning of the month has exceeded 60%. On July 18th, the stock price of KINTOR PHARMA-B opened and fell significantly, with a maximum intraday decline of over 8%. Based on the strategy of Hong Kong stock connect funds selling more as the price falls, this technical retracement may be the beginning of a reduction in some Hong Kong stock connect positions. Looking at the chart of the changes in Hong Kong stock connect holdings, it can be seen that on June 12th and July 10th, there were rapid decreases in the holdings proportion for KINTOR PHARMA-B, corresponding to the process of the stock price increase. Choosing between short-term profits or long-term value? It cannot be denied that even though KINTOR PHARMA-B has been removed from the Hong Kong stock connect for over a year, the current proportion of Hong Kong stock connect holdings for KINTOR PHARMA-B still exceeds 20%. The reason for this is that many mainland investors are still speculating on the long-term value of KINTOR PHARMA-B, as well as the expectation of returning to the Hong Kong stock connect, which is closely related to its current business development. It is understood that on November 27, 2023, KINTOR PHARMA-B experienced a significant drop in its stock price, with a decrease of over 30% at the opening, reaching a new low of 2.01 Hong Kong dollars during the trading day and a maximum decline of over 40%. The reason for such market panic was that KINTOR PHARMA-B disclosed the top-line data of its core product KX-826 in the treatment of androgenetic alopecia in a phase III clinical trial before the market opened that day. The results showed that although the KX-826 group TAHC improved at various visit points compared to the placebo group, the differences did not reach statistical significance. This was the third time that KINTOR PHARMA-B had encountered problems in the key product phase III clinical trials following the failure of Proclarain. However, unlike many pharmaceutical companies that choose to abandon the product after clinical failure, KINTOR PHARMA-B continued to expand the market for KX-826. It was announced last July 10th that KINTOR PHARMA-B will launch cosmetics based on KX-826 as the main component. The first product is an external anti-fall liquid for androgenetic alopecia (AGA). It can be seen that although this product is a cosmetic, it still targets the same hair loss market as products for androgenetic alopecia. According to a research report by GrandViewResearch, the global hair loss treatment market was worth $8.2 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 9.0% from 2023 to 2030, reaching an estimated market size of $16.02 billion in 2030. In China, according to the latest data from the National Health Commission, the number of people with hair loss in China has exceeded 250 million, equivalent to one in every six people suffering from hair loss. Among them, there are approximately 163 million men and 90 million women, with male pattern baldness patients accounting for 90%; and the hair loss group is becoming younger, with 84% of people under the age of 30 experiencing hair loss, with the largest proportion being young people aged 26 to 30, accounting for 41.9%. According to the "Deep Analysis Report on Hair Loss Industry Market 2023," the hair health industry in China is expected to grow at a rate of 260% per year in the next 10 years. The market size of hair loss drug therapy in China is expected to reach 15.5 billion yuan by 2031, with an expected compound annual growth rate of 32% from 2021 to 2031. In other words, the market is currently watching KINTOR PHARMA-B's potential crossover in the beauty industry with KX-826 as a "cosmeceutical" product and speculating on the possibility of it outperforming in the male pattern baldness market. This possibility may now turn into reality. It was recently announced that the results of a clinical observational study for the joint treatment of male pattern baldness in Chinese adult men with KX-826 and minoxidil by KINTOR PHARMA-B were significantly better than minoxidil alone. A clinical observational study results showed that the combination therapy group showed statistically significant advantages and clinical significance compared to the minoxidil group. After 24 weeks of treatment, the TAHC in the combination therapy group increased by 30.54 hairs/cm2 compared to baseline, an increase of 10.29 hairs/cm2 compared to the minoxidil group, with a statistically significant result (P=0.0075) compared to the minoxidil group. The researchers and subjects in the combination therapy group also showed increases in the HGA index. Furthermore, in terms of safety, the combination therapy group demonstrated good safety and tolerability in the clinical observational study, with a similar occurrence of adverse events in both groups. Additionally, there were no unexpected adverse events observed in the trial. Apart from achieving clinical success with KX-826, after announcing the approval of an International Nomenclature Committee for Cosmetic Ingredients (INCI) review of its self-developed KT-939 in October last year, KINTOR PHARMA-B has also accelerated the commercialization process of KT-939. Recently, the company announced the official launch of the global sales of KT-939. This means that KINTOR PHARMA-B's "beauty crossover" strategy, which was previously questioned by the market, has now matured, and its core product has demonstrated the potential for large-scale commercialization. KINTOR PHARMA-B's current PB valuation is 3.62, only at the average level of the biopharmaceutical industry and much lower than the level of the beauty industry at 7.73 times. If the company's valuation continues to approach that of the beauty industry, there may be significant upward potential for the stock price of KINTOR PHARMA-B.