Economic Observation Network The stock price of Shengtong Technology (02495. HK) has hit a new low in volume, with both revenue and profit increasing in the first half of the year, and the current valuation is at a relatively low level.

Stock price and fund performance
On September 11th, Shengtong Technology (02495. HK) closed at HKD 27.54, down 2.96%, setting a new low for the stage. However, what is more noteworthy is that this "new low" was achieved with extremely low trading volume: only 34600 shares, about HKD 957000, were traded throughout the day, with a turnover rate of 0.11%. Breaking the level with a large volume is the only meaningful trend, while a decrease in volume is more of a price drift due to insufficient liquidity.

Performance and business situation
The fundamentals do not support this price. The company's interim report is actually good: revenue of HKD 647 million (+35.1%), net profit of HKD 93.14 million (+27.4%), gross profit margin of 54.5%, newly acquired project contract value of HKD 825 million, and unpaid contracts at the end of the period of HKD 1.093 billion (+23.8%) ——Both revenue and profit increased, with a price to earnings ratio (TTM) of only 6.13 times and a price to book ratio of 0.49 times. At this valuation level, the market has already priced it entirely based on a "recession" rather than a 35% growth AI company.

Financial and technical aspects
Technically speaking, the stock price has fallen below all moving averages (28.92 on the 5th, 29.82 on the 20th, and 35.84 on the 60th), indicating a weak trend. Since the beginning of the year, it has fallen 62.38%, indicating that the market has not been convinced by its "enterprise level AI intelligent agent" story, and even though the interim report verified the performance, it has not been able to reverse. The core contradiction is not the deterioration of fundamentals, but rather the liquidity discount of small cap AI stocks in Hong Kong stocks and the market's questioning of whether the company can replicate benchmark projects as large-scale revenue.

Business Progress
There are two tracking signals: one is the follow-up customer expansion speed of the "Tongxiao" platform (the enterprise level agent development platform launched in June), and the other is whether the overseas market (the "the Belt and Road" in Central Asia) can achieve revenue Any substantial progress in either is a catalyst for valuation repair; On the contrary, the sluggish trend after the mid year report may continue.

The above content is based on publicly available information and does not constitute investment advice.