Media365
Shares of Chinese companies tied to commercial rocket production tumbled after they cautioned that a recent rally had outpaced underlying fundamentals.
Hunan Aerospace Huanyu Communication Technology plunged as much as 20 per cent on Tuesday, while China Spacesat dropped as much as 10 per cent before rebounding. Goldwind Science & Technology, which has a stake in rocket start-up LandSpace Technology, fell more than 13 per cent.
China Aerospace Times Electronics Technology, CICT Mobile Communication Technology and Beijing LeiKe Defense Technology were among those that issued warnings Monday night on excessive gains in shares.
“The long-term prospects for the commercial aerospace industry are very promising, but the market in the short term is mainly driven by speculative sentiment,” said Fu Zhifeng, chief investment officer at Shanghai Chengzhou Investment Management. Based on companies’ announcements last night, it seemed regulators were trying to cool down the speculative fervour, he said.
The company warnings follow sharp rallies in the stocks, fuelled by optimism over stronger policy support for the commercial space sector and expectations of technological breakthroughs. Hunan Aerospace shares have jumped more than 90 per cent since the start of December, while China Satellite Communications has surged 135 per cent. In comparison, the onshore benchmark CSI 300 Index advanced around 5 per cent since December 1.
There are “potential risks of overheated market sentiment and irrational speculation,” Geovis Technology, which develops digital-earth application platforms, said in a filing. “We urge all investors to be mindful of secondary market trading risks, make rational decisions and exercise prudent investment judgment.”
