Trade Alert

Dongguan Chitwing Technology (SHE:002855) is up 74% over the past month

_{Posted by Club Member Willie 007 13.10.23}

The company is reported to be one of Huawei’s suppliers and is expected to benefit from the launch of Huawei’s new Mate60 Pro smartphone series.

Economic data coming out of China continues to be weak, and the Chinese stock market has been under pressure all year. Despite these headwinds, Dongguan CT has managed to rally, the stock started the year around $8 CNY, and now trades around $46 CNY!

Yesterday we saw the Chinese sovereign fund announced that it is buying shares in four of China’s biggest banks, and plans to keep increasing its holdings over the next 6 months, a sign that the government may be ready to step in to support the Chinese stock market.

The market’s reaction to the news has been muted so far, but to the extent that incremental government support can boost investor sentiment, I think domestic equity flows will most likely favour stocks that has momentum, such as Dongguan CT.

Trying to decide if Dongguan CT’s massive rally has run its course and is now over extended, or momentum can keep pushing the stock further as local hedge funds and investors continue to chase Dongguan CT for proxy exposure to Huawei (since Huawei is a private company)?

Has anyone in the group looked into Dongguan CT, or has a view on Huawei’s smartphones sales?

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