Hefu China (603122) Limit-Up Reason and Risk Analysis

Hefu China (603122)’s limit-up this time was not driven by clear fundamental positives but by continuous speculation from speculative funds. Since October 28, 2025, the stock has gained 15 limit-up boards in 26 trading days, with the price rising from less than 6.5 yuan to over 26 yuan, an increase of more than 300%[1][2][4]. The Dragon and Tiger List shows that the top 5 buyers and sellers are all brokerage branch office seats, indicating obvious signs of hot money speculation and high participation from small and medium investors[4][5]. The company’s fundamentals are weak: Q3 2025 net profit was -5.048 million yuan, a year-on-year decrease of 225.26%[1][3]. It has also issued multiple risk warnings, clearly stating that “the stock price increase seriously deviates from the company’s operating conditions”[3].

1. The stock price rise is completely dominated by speculative funds; institutional participation accounts for only about 10% of total turnover, and market sentiment is extremely overheated[5].
2. Valuation bubble is severe: as of November 20, the static P/E ratio was 378.03 times, far higher than the industry average of 29.37 times for the wholesale industry[5].
3. The company has mentioned that “if the stock price rises further abnormally, it may apply for a trading suspension for verification”, so there is a risk of regulatory intervention[4].

• Valuation correction risk
  : The stock price seriously deviates from fundamentals, and a sharp drop may occur at any time[1][3][5].
• Profit pressure risk
  : Affected by domestic macroeconomic conditions and adjustments to medical industry policies, the company’s future performance still faces uncertainty[1][3].
• Controlling shareholder reduction risk
  : The company’s controlling shareholder plans to reduce its holdings by no more than 2% starting from December 24, 2025, which may put pressure on the stock price[1][2].
• Regulatory risk
  : If the stock price continues to fluctuate abnormally, it may face a trading suspension for verification by regulatory authorities[4].

The current stock price rise is a typical speculative market; no clear investment opportunities based on the company’s fundamentals have been found.

Hefu China (603122)’s limit-up this time is an inertial rise driven by speculative funds. The stock price seriously deviates from the loss-making fundamentals, with obvious valuation bubbles and multiple risks. Investors need to fully understand the relevant risks and make decisions cautiously.