Market Impact Analysis of Major Shareholder Reduction Plan for Meinian Health

I have now collected sufficient data to prepare this

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According to public information, Hangzhou Xintou, a shareholder of Meinian Health holding more than 5% of the shares, and its concerted action party Hangzhou Haoyue cumulatively reduced their holdings by

through centralized bidding and block trading from January 14 to 15, 2026, accounting for of the total share capital. Their shareholding ratio decreased from 10.00% to 8.71%[0][1]. This reduction is part of the reduction plan disclosed on December 10, 2025, which plans to reduce holdings by no more than of the company’s total share capital. The plan has [1].

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Continuous reduction actions by major shareholders usually convey the following market signals:

Reduction Motivation	Likelihood	Interpretation
Capital Demand	Medium-High	Regular exit demand, but other considerations cannot be ruled out
Overvaluation	High	The current P/E ratio reaches 96.49x, far exceeding the industry average. Major shareholders may believe the stock is overvalued
Information Asymmetry	Medium-High	Insiders have a more accurate judgment on the company’s true value and development prospects
Strategic Adjustment	Medium	Shareholders may reduce holdings based on adjustments to their own investment portfolio allocation

After the release of the reduction news, the market showed a

:

• Single-day Decline
  : The stock price closed down
  9.99%
  on January 16, 2026[0]
• Abnormal Trading Volume
  : Trading volume increased significantly during the period, indicating panic selling in the market
• Oversold Technical Indicator
  : The KDJ indicator shows a K value of 82.0, D value of 81.1, and J value of 83.8, all in the overbought zone[0]

This sharp reaction indicates that investors have a

of the major shareholder’s reduction behavior, worrying that there may be undisclosed issues with the company’s fundamentals.

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Based on the latest financial data[0][2]:

Financial Indicator	Value	Industry Evaluation
Profitability
ROE (Return on Equity)	3.98%	Weak
Net Profit Margin	2.95%	Low
Operating Profit Margin	6.85%	Medium
Solvency
Current Ratio	0.79	Low (warning line <1.0)
Quick Ratio	0.77	Low
Valuation Level
P/E (Price-to-Earnings Ratio)	96.49x	Extremely High
P/B (Price-to-Book Ratio)	3.78x	High

:

• The company adopts a
  conservative accounting policy
  with a high ratio of depreciation to capital expenditure[2]
• Debt risk rating is “Medium Risk”
  [2]
• Free cash flow performance is acceptable (latest FCF is approximately RMB 1.216 billion)[2]
• Profitability is severely mismatched with valuation, posing a
  risk of valuation bubble

:

• Steady revenue growth: Q3 2025 revenue reached USD 2.82 billion, representing a year-on-year increase of 6%[0]
• Strong recent stock performance (73.30% increase in the past year)[0]
• Beta coefficient of 0.89, with volatility lower than the market average[0]

:

• Extremely high valuation level (P/E ratio of 96.49x)
• Weak profitability, ROE less than 4%
• Liquidity pressure (current ratio <1)
• Continuous reduction by major shareholders may shake market confidence

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Valuation analysis was conducted using three scenarios[3]:

Valuation Scenario	Fair Value	Comparison with Current Price
Conservative Scenario	$5.84	-23.8%
Neutral Scenario	$7.21	-5.9%
Optimistic Scenario	$10.77	+40.6%
Probability-Weighted Valuation	$7.94	+3.7% upside potential

:

• The current stock price ($7.66) is slightly
  higher than the neutral scenario valuation (+6.4%)
  [3]
• The conservative scenario indicates the stock may be
  overvalued by approximately 24%
• DCF neutral assumptions: 8.1% revenue growth, 10.5% EBITDA margin, 10.0% WACC[3]

The major shareholder’s choice to reduce holdings at the current time may be based on the following considerations:

1. Valuation has fully reflected positive factors
   : After a half-year increase of approximately 50% in the early stage, the stock price has already discounted future growth expectations
2. Insufficient performance support
   : Extremely low ROE and net profit margin cannot support a 96x P/E ratio
3. Overheated market sentiment
   : KDJ overbought and abnormal increase in trading volume indicate a strong speculative atmosphere

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Based on technical analysis results[0]:

Indicator	Status	Signal Meaning
MACD	“Golden Cross” pattern	Medium-term trend is bullish
KDJ	J value 83.8 (Overbought)	Short-term pullback pressure
RSI	Normal range	No obvious overbought or oversold
Trend Judgment	Range-bound oscillation	Reference range [$6.07, $7.85]

:

• Strong Support
  : $6.07 (20-day moving average)
• Strong Resistance
  : $7.85

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Continuous reduction by major shareholders reflects the following market expectations:

Expectation Dimension	Expectation Content
Valuation Expectation	The current stock price is overvalued, with a neutral value of approximately $7.21
Performance Expectation	Profitability is weak, making it difficult to support high valuation
Capital Expectation	Shareholders believe there are better investment opportunities
Risk Expectation	There is a risk of undisclosed information asymmetry

Aspect of Impact	Degree of Impact	Explanation
Short-term Stock Price Pressure	High	Single-day decline of nearly 10%, selling pressure continues
Shaken Market Confidence	Medium-High	Reduction conveys negative signals
Valuation Regression	Medium-High	Conservative scenario shows 23.8% pullback potential
Fundamental Impact	Low	Does not affect the company’s continuous operation

⚠️

: The current P/E ratio reaches 96.49x, far exceeding the reasonable range
⚠️ : The reduction plan has not yet been completed, with approximately 1.71% of shares remaining to be reduced
⚠️ : Current ratio of 0.79, solvency requires attention
⚠️ : KDJ is overbought technically, with short-term adjustment pressure

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The continuous reduction plan of Meinian Health’s major shareholders conveys a

. Combining the following factors:

1. Valuation Aspect
   : The DCF neutral valuation of $7.21 shows the current stock price is approximately 6% overvalued, and the conservative scenario indicates about 24% pullback potential
2. Fundamental Aspect
   : ROE is only 3.98% and net profit margin is 2.95%; profitability cannot support a 96x P/E ratio
3. Technical Aspect
   : KDJ is overbought, and the stock price is at the upper edge of the range, with short-term adjustment pressure

: The major shareholder’s reduction behavior reflects the intention of , rather than a negation of the company’s long-term fundamentals. It is recommended that investors pay attention to the subsequent performance realization. If the analyst’s expectations of USD 14.1 billion in revenue and EPS of $0.26 in 2027 are achieved[3], the current valuation will have room for performance digestion. In the short term, attention should be paid to the during the implementation of the reduction plan.

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[0] Gilin API Market Data (https://www.gilin-ai.com/api)

[1] Securities Times - “Meinian Health: Two Shareholders Plan to Reduce Holdings by No More Than 3% of the Company’s Shares” (https://stcn.com/article/detail/3534226.html)

[2] Gilin API Financial Analysis Data (https://www.gilin-ai.com/api)

[3] Gilin API DCF Valuation Data (https://www.gilin-ai.com/api)