After a 66.38% cumulative decline over 90 trading days since listing, BENQ HOLDING (02581) is poised to face a more severe liquidity test in the capital markets. The company will see the lock-up period for cornerstone investors expire on June 22. This expiration involves a total of 33.252 million shares held by three cornerstone investors, accounting for 49.63% of the global offering. The release of nearly half of the shares in a market with limited liquidity could exert significant downward pressure on BENQ HOLDING's stock price if cornerstone investors opt to cut losses by selling. Conversely, if they choose to hold due to being deeply underwater, it will pose a major challenge for the company's management: when can BENQ HOLDING lead its cornerstone investors out of this loss-making quagmire?
Overvaluation and early shareholder exits are core internal factors behind the stock's weakness. As the largest private for-profit comprehensive hospital group in East China, BENQ HOLDING set a record for the worst first-day drop among Hong Kong IPOs in 2025, plunging 49.46% on its debut, causing heavy losses for IPO subscribers, with prolonged declines further dampening investor sentiment. This downturn stems from four main reasons. First, tightened liquidity at the time of listing led to a noticeable cooling in sentiment toward new listings. After a "new stock frenzy" from August to November driven by pricing mechanism reforms, market sentiment shifted abruptly in December. As year-end approached, southbound fund inflows narrowed significantly, with the Hong Kong Exchange's average daily turnover once falling below HKD 200 billion. Against a backdrop of intensified competition for limited funds, risk aversion rose, capital quickly retreated to high-certainty targets, and marginal new listings lacking fundamental support were abandoned, resulting in extreme polarization in profitability.
Second, an oversupply of new listings led to "aesthetic fatigue." Following 11 new listings in November, the number surged to 26 in December, especially with a "clearance" rush in late December. The short-term flood of supply overwhelmed market capacity, compounded by the aforementioned liquidity tightening, causing a cliff-like drop in new listing performance.
Third, overvaluation detached from fundamentals. Amid heightened competition for limited funds, inflated pricing unsupported by performance inevitably led to a forced valuation correction on the first trading day. Reviewing IPO data, BENQ HOLDING priced its offering at HKD 9.34 per share, issuing approximately 311.9 million shares, with an initial market cap of HKD 2.914 billion. However, this valuation was supported by only about RMB 108.9 million in net profit for 2024, implying a static P/E ratio as high as 25.34 times. Against an average P/E of around 17 times for Hong Kong's private hospital sector, this overvaluation stood out conspicuously. As market liquidity receded, high valuation lacking earnings support became a primary target for selling, with the severe first-day drop merely reflecting the inevitable correction from an "ivory tower" to "ground reality."
Indeed, this market divergence was evident during the offering stage. According to allocation results, the public offering of BENQ HOLDING was only modestly oversubscribed by 6.28 times, while the international placement recorded a "barely-there" subscription of 1.28 times after cornerstone investors locked in over 55% of the shares. This tepid response not only reflected lukewarm interest but also represented a "vote of no confidence" from institutions with real money, as a valuation nearly 50% above the sector average failed to appeal to rational professional investors. The root cause of this overvaluation lies in distorted pricing anchors in the primary market. The earlier IPO profit boom gave issuers an illusion of "holding out for higher prices," leading them to push through with steep valuations. However, when market sentiment shifted, secondary market investors refused to pay for inflated pricing.
Fourth, unrestricted selling pressure from early shareholders has been a core driver of BENQ HOLDING's persistent decline. A review of the prospectus reveals that pre-IPO investors were not subject to any lock-up arrangements, meaning these shareholders could immediately trade and cash out upon listing. Having invested in BENQ HOLDING for an extended period, particularly Mr. Cai and the investment company Leader International, who invested as early as 2009, their paper return was only 25.93% even at the IPO price; meanwhile, Shenghong, which invested in 2016, showed an 18.52% paper loss at the offering price. Given that BENQ HOLDING's IPO valuation remained significantly above the sector average, early investors had strong motivation to exit on the first trading day, with a high likelihood of capital withdrawal. More critically, without the key buffer of a "greenshoe mechanism," the initial "halving" of the stock price was just the beginning.
Beyond these three major early shareholders, a "hidden selling pressure" from over 30 natural persons also warrants attention. These shareholders, mostly employees, former employees, and family members of the controlling shareholder Qisda, collectively hold 1.52% of shares. Due to their dispersed holdings, low cost bases, and lack of unified market value management objectives, they are prone to a retail-driven sell-off cycle of "selling more as prices fall, causing further declines" once the stock breaks issue price, becoming another major force driving long-term declines.
Cornerstone investors likely to hold long-term; valuation advantages emerge but reversal signals still needed. While early shareholders may have successfully exited in a "race to reduce holdings," cornerstone investors who supported BENQ HOLDING's IPO are now deeply underwater. The lock-up expiration is undoubtedly a watershed; whether cornerstone investors choose to "cut losses and exit" or "hold and wait" will be a core variable dictating BENQ HOLDING's near-to-medium-term trend. To predict their moves, understanding the nature of cornerstone investors' capital is crucial.
BENQ HOLDING's three cornerstone investors are Herong Technology, Hefu China, and Suzhou Zhanxing Investment, holding 37.32%, 9.85%, and 2.46% of the total offering shares, respectively, totaling approximately 49.63%, nearly half of the total offering. Among them, Herong Technology, listed on the Taiwan Stock Exchange and known as the "Taiwan biotech stock king," has deep expertise in the biotech and healthcare sectors. As the largest cornerstone investor, Herong Technology's involvement likely extends beyond financial investment, potentially serving as strategic groundwork for future industrial collaboration. Hefu China (603122.SH), long focused on the in vitro diagnostic (IVD) product supply chain, integrated procurement of medical equipment, and hospital information management, may have supported BENQ HOLDING for business synergy and resource complementarity. Suzhou Zhanxing Investment, an industrial fund with Suzhou local government backing, represents local government recognition of BENQ HOLDING's regional value. Such industrial capital typically does not aim for short-term arbitrage but prefers to solidify local partnerships through capital ties, suggesting a relatively longer holding period and weaker short-term selling motivation.
Thus, the three cornerstone investors are likely inclined toward long-term holding. Given their deep underwater positions and the market's poor liquidity, opting to "cut losses" immediately after lock-up expiration would not only face execution challenges but also further depress the stock price, amplifying their losses. Therefore, the probability of cornerstone investors reducing holdings in the short term is relatively low.
However, market focus is shifting to the controlling shareholder, whose 74.61% stake will become conditionally unrestricted on June 22. As core decision-makers in company operations, the controlling shareholder's stance on buying or selling at this juncture will serve as a litmus test for their confidence in the company's future development.
Ultimately, the core factor determining BENQ HOLDING's long-term stock performance lies in its fundamentals, and the company is currently in a unique phase of "revenue growth without profit gains." While revenue has shown steady growth since 2022, net profits for 2024 and 2025 fell by 34.95% and 12.8% year-on-year, respectively, marking two consecutive years of profit decline. Profit weakness primarily stems from a dual squeeze: external policy price caps and internal heavy-asset expansion bleeding. Externally, the comprehensive rollout of DRG payment reforms in healthcare has imposed a "tight constraint" on per-treatment patient costs, directly capping hospital revenue growth. Internally, BENQ HOLDING's high-salary recruitment of renowned doctors to maintain its top-tier hospital rating during a downturn, coupled with the operational launch of the Nanjing Phase II new campus triggering a "peak" in depreciation and maintenance costs, has allowed rigid expenses to completely erode profit margins. Additionally, aggressive expansion has tightened cash flow, raising financial costs. Caught between these internal and external pressures, the company is trapped in a "revenue growth without profit gains" dilemma.
After a deep stock price correction, BENQ HOLDING's investment logic has subtly changed. With a cumulative drop of over 67%, its static P/E has retreated to around 9 times, near the lower end of the sector's average valuation range, seemingly entering the "strike zone." However, low valuation alone is not a reason for a rally; the core driver for valuation recovery still depends on whether the company can return to a growth trajectory operationally through "revenue expansion and cost reduction."
On the "revenue expansion" front, market attention centers on the execution of its "strong specialty" strategy. The company is focusing on high-barrier departments like pancreatic diseases and ophthalmology, attempting to escape the red ocean of healthcare price caps by increasing the proportion of high-value medical services. Meanwhile, as the Nanjing Phase II campus passes its incubation period, whether improved bed utilization can translate into tangible economies of scale, and whether external mergers and acquisitions and commercial insurance partnerships can bring incremental patient flow, will be key to revenue recovery.
On the "cost reduction" front, the real game-changer lies in implementing technological initiatives. Leveraging its parent company's background, whether BENQ HOLDING can use AI and smart healthcare to reshape diagnosis and treatment processes and reduce operational costs will directly determine its ability to escape the "revenue growth without profit gains" quagmire and repair its weak net profit margin.
In summary, the current low valuation is more a static outcome of risk clearance than a signal of reversal. Whether the company's operations can successfully shift from "burning cash to expand scale" to "refining efficiency" still requires continuous verification through financial reports. Investors should remain cautious and wait for clear positive signals.
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