A mysterious stock with 8500% growth

22.02.2019 / 11:09

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One of the biggest mysteries in the investment world is located in the tallest skyscraper in Hong Kong.

There is the headquarters of a company that appears to be a killer success. The shares of China Ding Yi Feng Holdings Ltd. (DYF) have risen by 8563% over the past 5 years. However, if we ask local traders about the surge in price, they will tell us that there is no logic in this. The company has been losing in 7 of the past 8 years, which is a cause for criticism in the Chinese media.

"The fundamentals does not support the company's record rally at all," says Li Yuanrong, who is a 20VC manager.

The peculiar movement at DYF is another "miracle" in the list of surprise moves that can seriously damage Hong Kong's reputation in the financial world.

It turns out that large investment funds such as Vanguard, Black Rock and Northern Trust Corp. buy shares of China Ding Yi Feng Holdings Ltd. from November, as their rationale is that they look at quantitative models related to price, cash flow and liquidity and do not see any other fundamental criteria.

If we compare the DYF with companies like Tesla and Apple, the mystery will get even bigger:

The rise in the price of such a company is another signal of probable problems in Hong Kong's regulations and exchanges.

Source: Bloomberg Finance L.P.

Chart: Used with permission from Bloomberg Finance L.P.

Trader Nikolay Georgiev

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A mysterious stock with 8500% growth

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