Behind Leo Group's "Floor-to-Ceiling Board": Risks and Opportunities Amid AI Concept Speculation

Leo Group has become the focus of the market today due to its highly dramatic intraday movement. The stock opened at the limit-down price of RMB 6.81, with a low opening amplitude of 9.86%, and was once pinned to the limit-down board by RMB 1.8 billion in sealed orders. However, it was later forcefully prized open by mysterious funds, and the stock price rose rapidly from around RMB 7.59, hitting a high of RMB 8.97, with an intraday maximum gain of over 15%, and finally closed at RMB 8.40, with an intraday amplitude of over 30% [2][0]. Such a “floor-to-ceiling board” move is extremely rare in the A-share market. Today’s turnover exceeded RMB 11 billion, tying with Avic Electronics for the top spot in the market, with a trading volume of 2.07 billion shares, 4.35 times the average daily trading volume (475 million shares) [3][0].

In terms of market popularity, Leo Group strongly ranked 1st on the Flush Hot List, with its popularity ranking first, and the main funds’ net purchase amount on the day reached RMB 2.865 billion [1]. Historical data shows that the stock has entered the top 10 in popularity 75 times in the past year, with an average single return of 2.46% under the condition of a two-day holding period [1]. The combination of high popularity and extreme market movement has attracted a large amount of short-term speculative funds to participate in the game.

There are multiple driving factors behind Leo Group becoming a hot target. First is the continuous speculation of the AI application concept. As a hot concept target of “AI Application” and “GEO Marketing”, Leo Group has benefited from the market sentiment brought by the recent AI concept boom [4]. However, in its self-inspection announcement, the company clearly stated that its AI business “has not yet formed a large-scale profit model as a whole”, and the relevant revenue “accounts for a small proportion of the company’s overall operating revenue”, which “does not constitute a significant impact” on the overall operating performance [4]. This official statement is clearly detached from the market’s speculative enthusiasm.

Second is the speculative appeal brought by extreme price volatility. From December 31, 2025 to January 15, 2026, Leo Group accumulated a gain of up to 102.73% in 10 trading days, and the stock price once hit a record high of RMB 10.40 [4]. After resuming trading on January 21, it fell by the limit for two consecutive days, and today it experienced a huge volatility of “floor-to-ceiling board”. Such violent price volatility provides a rich gaming space for short-term funds. From the capital perspective, the main funds bought a large amount of RMB 2.865 billion [1], indicating that organized funds are strategically bottom-fishing at the limit-down position.

From the technical indicator analysis, Leo Group’s current stock price is in a horizontal consolidation stage, and no clear trend direction has been formed yet. The MACD indicator shows a death cross, sending a bearish signal; in the KDJ indicator, K is 51.7, D is 73.4, and J is 8.2, also sending a bearish signal [0]. The 20-day moving average (RMB 7.74) constitutes an important short-term support level. If it breaks below, it may test the range of RMB 6.50-7.00. The reference trading range is RMB 7.74-8.66, and the current price is in the upper-middle part of the range [0]. It is worth noting that the stock’s beta coefficient is only 0.27, showing low volatility characteristics, but the recent extreme market movement has significantly deviated from the historical volatility pattern [0].

From the price performance, although today’s “floor-to-ceiling board” recovery movement occurred, the cumulative decline in 5 days still reached 19.23%, indicating significant short-term correction pressure. However, the monthly increase is still 65.03%, the half-year increase is 125.81%, the one-year increase is 128.88%, and the three-year increase is as high as 356.52% [0], and the medium and long-term trend remains in an upward channel.

Fundamental data shows that Leo Group’s current valuation is in an extremely high range. The P/E (TTM) reaches 111.51x, P/B is 4.12x, P/S is 2.88x, and ROE is only 3.74% [0]. This valuation level far exceeds the average of the machinery manufacturing industry, showing the market’s over-optimistic expectations for the company’s AI transformation prospects.

From the profit performance, the company’s net profit in 2024 was -RMB 259 million, in a loss state [4]. In the first three quarters of 2025, it achieved a net profit of RMB 589 million, with improved performance but limited absolute amount [4]. In terms of earnings per share, it remained in the range of RMB 0.02-0.07 in each quarter of 2025, with average profitability. The company’s main businesses are divided into pump and system business (traditional manufacturing) and digital marketing business, of which the revenue from AI-related businesses accounts for a small proportion and has not yet formed a substantial performance contribution [4].

Based on the above analysis, Leo Group has the following main risks:

: The 111x P/E valuation is based on expectations for the future growth of the company’s AI business, but the company has clearly stated that its AI business has not yet formed a large-scale profit model [4]. If market expectations are not met, there is a risk of a sharp valuation correction.

: The net profit in 2024 was a loss of RMB 259 million, with large performance fluctuations, and the sustainability of fundamental improvement remains to be verified [4]. High valuation requires sustained performance growth to digest.

: Today’s intraday volatility exceeded 30%, and the “floor-to-ceiling board” after consecutive limit-downs is mostly a short-term fund speculation behavior, and its sustainability is questionable [2]. Such extreme market movements are not suitable for conservative investors to participate in.

: The skyrocketing stock price is mainly driven by the AI concept, rather than substantive fundamental improvement [4]. Once market sentiment turns, concept stocks often face violent adjustments.

: It is not recommended to chase high and buy. After today’s “floor-to-ceiling board”, short-term funds may choose to take profits, and tomorrow’s movement is crucial. If it can stand firmly above the resistance level of RMB 8.66, it may continue the rebound trend; otherwise, it may test the support of RMB 7.74 or even lower again.

: It is necessary to observe whether the fundamentals can keep up with the stock price performance. The substantive progress of the company’s AI business is a key observation point. If the stock price pulls back to the range of RMB 7.00-7.50, light position layout can be considered, but strict stop-loss must be set. The 2025 annual report to be disclosed on April 28, 2026 will be an important verification node.

: The current valuation level lacks fundamental support. A P/E ratio of over 100x requires substantial performance growth to digest, and the AI industry is highly competitive. There is great uncertainty whether Leo can stand out in the fierce competition.

: Investors should closely pay attention to the substantive progress of the AI business, whether the stock price can stabilize in the current area, whether the main funds continue to flow in, and changes in market sentiment. If participating in the game, it is necessary to strictly control the position, set a stop-loss level, and prevent losses caused by extreme volatility.