Assessment Report on the Rationality of the Surge in Zhejiang Wenlian (600986.SS) Stock Price

Based on the above data, I provide you with the

:

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Indicator	Data	Market Comparison
Stock Performance (January 5 to Date)	+58.44%	Shanghai Composite Index +4.28% in the same period
Current Stock Price	CNY 12.39	52-week high
Dynamic P/E Ratio	132.13x	Media industry average 53.13x
Price-to-Book Ratio	3.50x	Significantly higher than industry average
Trading Volume Surge	2.18x	Trading volume in the last 5 days is 2.18x the average

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Financial Indicator	Zhejiang Wenlian	Industry Average	Assessment
Dynamic P/E	132.13x	53.13x	149% Overvalued
ROE (Return on Equity)	2.44%	Industry top performers >15%	Weak Profitability
Net Profit Margin	1.64%	Industry average ~8%	Thin Profitability
Net Profit in Q1-Q3 2025	CNY 127 million	19.68% YoY decline	Declining Performance

: Current valuation has overdrawn growth expectations for the next several years, yet there is no significant improvement in the company’s fundamentals [0].

According to the company’s official announcements and news reports [1][2]:

• The company only announced the launch of the HochiGEO Agent in
  November 2025
• As of the announcement date (January 13, 2026),
  the GEO business has not generated any revenue
• The business model is
  not yet mature
  , and there are
  material uncertainties
  regarding market acceptance and profitability
• The company’s core business remains
  advertising agency services
  , accounting for 100% of revenue

This means the GEO concept being hyped by the market is still in the

, with a long way to go before commercialization.

Technical analysis shows [0]:

Indicator	Value	Signal Meaning
KDJ	K:92.5, D:86.0, J:105.6	Severely Overbought
RSI	In Overbought Zone	High Correction Risk
MACD	Bullish Bias but No Golden Cross Signal	Need Confirmation
Beta	0.71	Low Correlation with Broad Market

: Short-term technical indicators all point to .

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Zhejiang Wenlian clearly stated in its abnormal fluctuation announcement [1]:

“The company’s GEO business has not yet formed a mature profit model, and there are uncertainties regarding market acceptance and profitability. No relevant revenue has been generated so far. The company’s stock price has risen sharply in the short term… Its P/E ratio is significantly higher than the industry average. We remind all investors to pay attention to secondary market trading risks and invest prudently.”

In addition to Zhejiang Wenlian, multiple GEO concept stock companies have issued risk warnings [1][2]:

Company	Surge	Key Announcement Points
Yinli Media	+97.54%	GEO Business Division is still in the formation and planning stage, no revenue generated
Tianlong Group	+93.56%	AI tools have not generated additional revenue
Borui Communication	Announcement	GEO business revenue is 0
Xinhua Net	Announcement	GEO business has not generated revenue

• Dynamic P/E ratio is
  2.5x the industry average
• Current stock price has hit a 52-week high
• A surge without fundamental support is often followed by a
  sharp corrective decline

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Assessment Dimension	Score	Explanation
Fundamental Support	2/10	Declining performance, weak profitability
Valuation Rationality	1/10	P/E is 2.5x the industry average, severely overvalued
Concept Support	3/10	GEO concept has long-term potential but no short-term revenue
Technical Aspects	2/10	Severe overbought, high correction risk
Overall Score	2/10	Highly not recommended to chase the rally

1. Valuation Disconnected from Fundamentals
   : 132x P/E is 2.5x the industry average, yet the company’s ROE is only 2.44% and net profit fell 19.68% year-on-year, with no logical support for the high valuation.
2. Hyped Concept Has Not Been Monetized
   : The company clearly announced that the GEO business has not generated revenue, the business model is still under exploration, and it cannot contribute to performance in the short term.
3. Technical Indicators Show Severe Overbought Conditions
   : KDJ indicators are all in the overbought zone, and trading volume has abnormally surged (2.18x the average), suggesting speculative capital driving the price higher.
4. Company Proactively Warns of Risks
   : The company has continuously issued risk warning announcements, and management has clearly reminded investors to pay attention to secondary market trading risks.
5. Collective Industry Risk Warnings
   : Multiple GEO concept stocks have simultaneously issued “cooling-off” announcements, and systemic industry risks are accumulating.

• The stock price has risen too much in the short term and may face
  risk of a sharp correction
  at any time
• Current valuation has fully priced in optimistic expectations; if expectations are unmet, there will be a
  double kill of valuation and performance
• Investors are advised to
  avoid chasing the rally
  and wait for valuation to return to rationality before re-evaluating

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[0] Jinling API Market Data (600986.SS real-time quotes, technical analysis, financial analysis)

[1] Sina Finance - “GEO Concept Stocks Remain Hot, Multiple Companies Issue Intensive ‘Cooling-Off’ Announcements” (https://finance.sina.com.cn/jjxw/2026-01-13/doc-inhheqfm8979398.shtml)

[2] Xincai.com - “Multiple Companies Issue Intensive ‘Cooling-Off’ Announcements: No Mature Business Model or Revenue Formed” (https://www.xincai.com/article/nhheqfm8979398)

[3] Simuwang.com - “Which are the GEO Concept Stocks? 2026 List of GEO Concept Companies” (https://www.simuwang.com/news/285051.html)