In September of this year, Kangji Healthcare (09997)'s stock price dropped rapidly to HK$4.91 during a wave of “six consecutive declines” at the beginning of the month, falling 15.20% in the range. However, in the case of volume decline on September 11, this downward trend was stopped the next day, and then broke out of nearly a month's upward trend, hitting the highest stock price point of HK$6.74 in the October 8 intraday period. In addition to external factors that prompted it to stop its decline and rebound, Kangji Healthcare's continued stock repurchases were also one of the important reasons.

The Zhitong Finance App observed that Kangji Medical's stock price closed down 5.46% on November 22, showing a “triple decline” trend. The company once again chose to boost market confidence through repurchases. Meanwhile, in the next 7 trading days, Kangji Healthcare's stock price will rise again, and how long this rise will last is undoubtedly the focus of investors' attention.

If the stock price falls, buy it back

Statistics from the Zhitong Finance App show that since the beginning of 2024, Kangji Medical has repurchased 58 times, and the cumulative number of shares repurchased has reached 7.5075 million shares. The repurchase amount is HK$44.723 million, accounting for 0.62% of the company's total share capital.

Due to frequent repurchases, Kangji Healthcare's stock price increased by 12.43% from the beginning of the year to date. Judging from this year's repurchase situation and stock price trends, the decline and upward fluctuations in Kangji Medical's stock price are closely related to the company's stock repurchase pace.

Kangji Healthcare has a total of 5 key points in stock repurchases this year, on December 22, May 30, September 11, October 16, and November 22, 2023, respectively. Among them, repurchases from December last year continued for 17 days, ending on January 18; repurchases from May 30 continued for 29 days until July 18; repurchases from September 11 continued for 9 days, ending on September 25; while repurchases from October 16 and November 22 lasted only 4 days and 3 days, respectively.

Statistics from the Zhitong Finance App show that in the first 5 trading days of the above 5 repurchase points, Kangji Medical's stock price ranges declined by 10.57%, 6.08%, 9.67%, 8.81% and 1.35%, respectively. As can be seen, every time the company's stock price falls, Kangji Medical basically chooses to boost market confidence and stabilize the stock price through stock repurchases.

Stock buybacks are generally viewed as good news because this behavior shows that the company is confident in its own future prospects and is willing to use its own funds to buy back the shares. This action can reduce the number of tradable shares in the market and increase earnings per share and return on net assets, which may drive up the company's stock price. According to statistics from the Zhitong Finance App, Kangji Medical's stock price increases during the five repurchase periods this year were 2.50%, -8.34%, 8.38%, 3.15%, and 5.60%, respectively. It can be seen that since this year, every share buyback of Kangji Healthcare has not always been able to drive up the stock price.

However, the rise in the secondary market corresponding to Kangji Medical's stock repurchases at five time points this year may reflect a change in the market's attitude towards it. According to the data, in the first two repurchases of the company's shares, Kangji Medical continued for 17 and 29 days, respectively. The number of shares repurchased was 1.971 million shares and 4.619 million shares, respectively, accounting for 87.78% of the number of stock repurchases this year.

Generally speaking, the reaction in the secondary market is positively correlated with the scale of the company's repurchase. If the scale of the repurchase is large, the market reaction is more obvious, and vice versa. However, Kangji Healthcare's performance was clearly the opposite. Excluding the increase in the September market, the company quickly stabilized its stock price by only buying back 0.275 million shares and 353,000 shares in the October and November markets, respectively. The stock price increase performance was also better than the situation after the first two repurchases this year.

Will the stock price continue to rise or is the market washing imminent?

In mid-late September of this year, under the double impetus of the launch of the Hang Seng Index and stock buybacks, Kangji Healthcare's stock price rose rapidly. From September 11 to October 8, the highest increase in the company's stock price range reached 37.27%. And inChip distributionOn the chart, it's not hard to see the binge in the secondary market. The chip profit ratio rose sharply from 1.75% to a maximum of 93.64%.

However, as the overall correction of Hong Kong stocks began on October 8, Kangji Healthcare's stock price also fell rapidly after hitting a range-high point on the same day. The company's stock price fell to a minimum of HK$5.66 within 7 trading days, and the biggest drop in the range reached 16%. The company's stock price also fell below the 5-day line on October 16. Judging from the market situation, from October 16 to November 20, Kangji Healthcare began a period of stable sideways trading for about a month. During this period, the company's stock price increased by only 1.53%. The sideways phase is undoubtedly a good opportunity for buyers to raise funds.

During the one-month adjustment, many retail investors of Kangji Healthcare chose to cut meat and hand over bloody chips, and chip peaks gradually gathered around the cost line. At this point, 70% of the chips were concentrated in the HK$5.60-6.12 range, and the profit ratio was once again reduced to 11.20%. As can be seen, on November 21, Kangji Medical's market turnover decreased markedly. It was only 0.2375 million shares, in stark contrast to the volume of millions of shares in the first and next two trading days. The side shows that at this time, there were few market sales, and most of the chips were locked in by the main forces.

As a result, after the company announced a new round of stock repurchase plans on the evening of November 22, the main capital on November 25 began to raise the company's stock price out of the cost range with favorable capital. The notable features of this round of the market are that the bottom chips disappear quickly, the top chips easily cross the cost line, and form a single peak concentration above the cost line.

However, it is worth noting that during the 4 trading days from November 28 to December 3, Kangji Medical's trading volume continued to expand, but the turnover rate did not increase significantly. Even on December 3, when the volume was the biggest, its turnover rate was only 0.39%. The low turnover rate usually indicates that the opinions of both sides are basically the same, and the main capital has no plans to ship in the short term. The stock price will generally maintain the original operating trend and develop further.

fromMACDLooking at the indicator situation, since the MACD red bar reversal appeared on December 2, it indicates that this round of the bullish market has already been determined.Technical sideThis is a sign of intervention. In the next 3 trading days, although Kangji Healthcare fluctuated in terms of trading volume, the MACD red bar continued to rise, which also indicates that the probability of its subsequent stock price increase is increasing.

Looking at brokers' trading seats, in the past 5 days, Kangji Healthcare's largest buyer was Yingtou Securities, which bought 1.4174 million shares as the largest buyer; while the top three sellers were HSBC and the two Hong Kong Stock Connect channels, which sold 0.4342 million shares, 0.4265 million shares, and 263,000 shares respectively.

Although Yingtou Securities was Kangji Healthcare's biggest buyer since the 5th and 20th, on the last two trading days of December 4 and 5, Citibank and CITIC Lyon alternately took the first place as buyers, buying 0.7532 million shares and 852,000 shares respectively.

Judging from the real-time flow of funds from Kangji Healthcare, on December 5, while capital from China orders continued to flow in and a small outflow from very large single-core small orders, there was a sharp inflow of capital from large orders, which led to a continuous net inflow of overall capital. On the same day, Kangji Healthcare had a net inflow of HK$5.8428 million.