On the evening of August 31 this year, Jiangxi Bio (06915) released its first interim report since listing. During the reporting period, the company recorded revenue of 83.3 million yuan, a year-on-year decrease of about 16.5%; net profit for the same period was 14.366 million yuan, a year-on-year decline of 61%. The day after the earnings report was released, Jiangxi Bio's share price closed sharply lower by 12.74%, after which the company's stock began a one-and-a-half-month decline. During intraday trading on October 14, its share price fell to a low of HK$8.40, giving back all the gains made since August 11. Against this backdrop, when Jiangxi Bio will release a hedging signal to catalyze a subsequent stabilization and halt to the decline has become the focus of investors' attention.
When will it escape the downtrend?
Since August 31, Jiangxi Bio's maximum drawdown in this downward channel has reached 60.19%. In fact, however, before that its share price had already staged a clear rally in mid-to-late August. According to Zhitong Finance APP observations, thanks to the concentrated pricing of the existing positive news that "the commercialization of veterinary TAT opens a second growth curve," combined with the technical rebound from oversold conditions at the time and optimistic expectations for the company's platform-based transformation during the late-August interim report window, Jiangxi Bio's share price staged a typical sentiment-driven rally in a recently listed small-cap stock from August 11 to August 28. Among these, in just the two trading days of August 11 and August 12, Jiangxi Bio's cumulative share price gain reached 57.16%, directly recovering above the company's issue price of HK$11.2. From the perspective of the entire market phase, if measured from the lowest HK$3.95 after breaking below its issue price on the first day of listing to the intraday high of HK$21.10 on August 28, the company's maximum share price gain during that phase reached 434.18%. The core logic supporting this rally was Jiangxi Bio's fundamental shift from a "single human-use TAT pharmaceutical company" to an "antiserum platform + dual drivers of human-use/veterinary-use," which in the secondary market was reflected in capital's concentrated pricing of Jiangxi Bio's positive news since July this year regarding "approval and production of veterinary TAT." At that time, as a recently listed stock that had been public for only about 40 days, with a public float of only about 25%, Jiangxi Bio's average daily turnover was only in the tens of millions. This meant that a small amount of incremental capital could push the company's share price up rapidly, and the liquidity premium also accelerated the company's share price gain at that time, which in turn brought short-term overheated technical signals. According to Zhitong Finance APP observations, after half a month of clear gains, whether it was the RSI peak reaching 75.79, the KDJ-J value reaching 94.24, or the closing price on August 28 approaching the upper Bollinger Band, all reflected short-term overheating signals in Jiangxi Bio's share price and also indicated that this recently listed small-cap stock had already reached the mid-to-late stage of a strong trend acceleration in that rally. However, short-term technical overheating was clearly not the main reason for the subsequent full retracement of its earlier gains. It is not difficult to see that, unlike a normal technical share price correction, after August 31 Jiangxi Bio's share price did not show the conventional pattern of topping out with shrinking volume and slowly pulling back to the moving averages to digest valuation. Instead, after the earnings disclosure it fell all the way from a high of HK$20.50, accompanied by a clear retreat in liquidity. As of October 14, Jiangxi Bio's share price had fallen below all short- and medium-term moving averages; at the same time, the MACD indicator was still running below the zero axis, while although RSI and KDJ had entered oversold territory, no bottom divergence signal had yet appeared, and ADX was as high as 52.23, showing a strong signal of trend continuation. Cross-validation by multiple technical indicators also shows that Jiangxi Bio's share price is still in a downward channel of being "oversold but not yet stabilized." In fact, on September 16-18, under the catalyst of industry-wide positive news, Jiangxi Bio's share price also staged a small rebound, with its share price once rebounding to a high of HK$16.51 on September 18. However, the modest price-volume fluctuations did not receive technical support: its MACD indicator remained negative and the closing price that day was still below the 20-day moving average. The absence of an obvious bottom divergence signal meant that the medium-term trend of Jiangxi Bio's share price at that time had not been effectively repaired. As multiple pressures from sector volatility, fundamentals, and technicals were concentratedly released on Jiangxi Bio, this small-cap stock with low float, it finally staged a volume breakout within a downtrend on October 12, closing sharply lower by 18.26% that day, with corresponding trading volume 2.3 times that of the previous trading day, rising to 2.0475 million shares.
Could the commercialization of veterinary TAT becoming a reality be the key to a share price reversal?
On August 18 this year, China Merchants Securities International released a research report initiating coverage of Jiangxi Bio and giving it an "Overweight" rating, with a target price set at HK$23.6. Its core assumptions in the report were the company's systematic volume ramp-up in the veterinary drug segment, the recovery of overseas orders, and the smooth advancement of its anti-snake venom serum pipeline. The brokerage said in the report that "Jiangxi Bio is accelerating its transformation from a single tetanus antitoxin (TAT) leader to a comprehensive antiserum platform. Its pipeline in development focuses on rigid-demand areas with severe supply shortages and is about to enter a harvest period." It is not difficult to see that Jiangxi Bio's share price at this time was already at a significant discount to the above target price, which on the other hand also indicates that the market had already priced in negative factors such as pressure on the company's interim report and short-term profit decline. If the company's share price is to subsequently stage a "bad news fully priced in" rally in the short term and move closer to institutional expectations, performance validation of its veterinary TAT may be an important condition. According to Zhitong Finance APP, globally, the veterinary tetanus antitoxin market had a market size of about US$30.2 million in 2024. By 2028, the market is expected to grow to US$76.8 million, with a compound annual growth rate of 26.3%. In the Chinese market, the scale of China's veterinary tetanus antitoxin in 2024 was about US$2.2 million, and it is expected to grow to US$9.1 million by 2028, with a compound annual growth rate as high as 42.8%. By 2033, the Chinese market size is expected to further reach US$24.9 million. In terms of market competition, the current domestic veterinary tetanus antitoxin industry is highly concentrated, with only about four licensed large-scale manufacturers, while small and medium-sized manufacturers are relatively weak in production capacity and technical strength, and industry competitive pressure is far lower than in the homogenized chemical veterinary drug sector. Against this backdrop, the market is clearly willing to bet on the expectation that the company will achieve dual drivers of "human drugs + veterinary drugs," which is also one of the core logics driving the company's share price rise from August 11 to 28. From a market perspective, after panic selling and stop-loss selling concentratedly poured out and caused Jiangxi Bio's share price to show the characteristics of a "final drop" on October 12, it already showed obvious volume shrinkage on October 13-14, which to a certain extent also indicates that while active selling pressure has decreased significantly, investors inside and outside the market are gradually moving toward consensus. Under such low liquidity, the bottoming characteristics shown by "shrinking volume" may also signal the beginning of a new round of bottom consolidation or even stabilization in the company's share price.
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