Impact Analysis of Shareholding Reduction by the Controlling Shareholder of Hesheng Silicon Industry (603260.SS)

Based on obtained market data, financial data, and technical analysis, below is a detailed impact analysis of the large-scale shareholding reduction by the controlling shareholder of Hesheng Silicon Industry:

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Item	Details
Shareholding Reduction Subject	Hesheng Group (Controlling Shareholder)
Number of Shares to Be Reduced	35,466,200 shares
Reduction Ratio	3% of total share capital
Reduction Period	February 11 to May 10, 2026 (approximately 90 days)
Reduction Method	Centralized Auction + Block Trading
Reason for Reduction	Own capital needs
Source of Shares	Obtained before IPO

Based on the current stock price of RMB 53.95, the estimated amount of this shareholding reduction is

. [0]

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• Absorption Period
  : Based on the average daily trading volume of 15.75 million shares, it will take approximately
  2.3 trading days
  to absorb the reduced shares, accounting for about 2.5% of the shareholding reduction window
• Impact on Floating Shares
  : Assuming floating shares account for approximately 25% of total share capital, this reduction accounts for
  about 12% of floating shares
  , which is a moderately large pressure on floating shares [0]

Indicator	Value	Signal Interpretation
Trend Judgment	Sideways Consolidation	No clear direction, oscillating pattern
Support Level	RMB 53.00	Key support level
Resistance Level	RMB 54.90	Key resistance level
KDJ Indicator	K=26.4, D=30.1	In oversold territory
MACD	No crossover	Weak signal
Beta Value	0.34	Low volatility relative to the broader market [0]

Scenario	Stock Price Change	Estimated Price
Bullish Scenario	+2%	RMB 55.03
Neutral Scenario	-3%	RMB 52.33
Bearish Scenario	-7%	RMB 50.17

: Within 3-5 trading days after the shareholding reduction announcement, the stock price faces , but due to:

• The shareholding reduction window is long (90 days), so selling pressure is relatively dispersed
• The current stock price is near the medium-term support level
• Technical indicators show oversold conditions, with potential for a rebound

It is expected that the

; if market sentiment cooperates, it may find support near the RMB 53 level.

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Dimension	Indicator	Assessment
Profitability	ROE: -0.11%, Net Profit Margin: -0.16%	Loss-making state, requires attention
Liquidity	Current Ratio: 0.31, Quick Ratio: 0.11	High Risk [0]
Debt Risk	Category: High Risk	Requires vigilance
Cash Flow	Free Cash Flow: -RMB 1.092 billion	Net outflow state

:

• The company is in a loss-making state (P/E ratio is negative at -1786.55x)
• Tight liquidity, questionable debt-servicing ability
• The controlling shareholder’s shareholding reduction may send a signal of
  lack of confidence
  in the company’s future development
• The chemical/basic materials sector has performed weakly recently (the sector fell by -0.53% on the day) [0]

:

• The company adopts conservative accounting policies, and asset quality is relatively reliable
• Low beta value (0.34), stock price volatility is relatively controllable
• Although the 3% reduction ratio is large, it will not change the company’s control structure

Considering:

1. The company’s liquidity ratio is far below the healthy standard (usually >1.0)
2. Profitability has not yet recovered
3. The controlling shareholder’s shareholding reduction may reflect
   capital chain pressure
   or
   demand for investment returns

It is expected that long-term valuation will face

, and key focus should be placed on:

• Progress in the company’s liquidity improvement
• Recovery of the organic silicon industry’s prosperity
• The company’s debt repayment plan

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• Holders
  : May consider reducing positions moderately near the RMB 54.90 resistance level, and replenish positions after pulling back to the RMB 53 support level
• Onlookers
  : It is recommended to wait until after the completion of the shareholding reduction (mid-May) to enter the market, when market uncertainty will be reduced
• Risk-Takers
  : If the stock price breaks below the RMB 53 support level sharply with increased volume, may consider short-term rebound trading

• Impact of Shareholding Reduction
  : The 3% shareholding reduction has limited impact on long-term valuation, but attention should be paid to whether there will be further reductions in the future
• Key Focus Areas
  : Progress in the company’s liquidity improvement, whether the 2025 performance can turn from loss to profit
• Industry Cycle
  : The cyclical reversal of the organic silicon industry is the key to the company’s valuation recovery

1. Liquidity Risk
   : Current ratio is only 0.31, there is a risk of debt default
2. Performance Risk
   : The latest quarterly EPS is significantly lower than expected (-75.87%)
3. Shareholding Reduction Execution Risk
   : If the stock price continues to fall during the reduction period, the actual reduction amount may be lower than expected
4. Industry Risk
   : The basic materials sector has performed weakly recently

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Dimension	Impact Assessment	Expected Range
Short-Term Stock Price	Bearish , but limited in magnitude	-3% to -5%
Medium-Term Valuation	Neutral , pending performance verification	Range-bound oscillation
Long-Term Valuation	Under Pressure , requires liquidity improvement	Structural differentiation

: The controlling shareholder’s 3% shareholding reduction puts certain pressure on the short-term stock price, but considering the long shareholding reduction window and the current low valuation level, the downside space is expected to be limited. Long-term valuation recovery still depends on the company’s performance improvement and resolution of the liquidity crisis. It is recommended that investors closely monitor the company’s subsequent announcements and liquidity situation.

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The chart above shows the stock price trend, trading volume analysis, shareholding reduction scenario forecasts, and comparison of key financial indicators of Hesheng Silicon Industry.

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