On December 15, HYGEIA HEALTH (06078) announced a share buyback plan, stating that "the current trading price of the shares does not reflect their intrinsic value or the company's actual business prospects." The board resolved to repurchase shares on the open market for a total consideration of no less than RMB 300 million. Although the specific timing of the buyback was not disclosed, HYGEIA HEALTH acted swiftly, executing its first repurchase just two days later. On December 17, the company spent approximately HKD 6.0098 million to buy back 493,800 shares, which were subsequently converted into treasury shares.
From a secondary market perspective, HYGEIA HEALTH's stock price hit a yearly low of HKD 11.33 on December 12, showing a downward trend away from the 5-day moving average. The company's announcement of the buyback on the second trading day after this low point temporarily reversed the bearish sentiment.
However, the stock has been in a downtrend since August 1, when a significant bearish candlestick marked the beginning of a nearly three-and-a-half-month decline. Following a profit warning in its interim report, the stock price fell to the lower Bollinger Band and remained near this level with low trading volumes—averaging below 10 million shares per day from August 19 to September 15. Despite minor rebounds in late September and early November, the lack of volume signaled weak momentum, leading to further declines after touching the upper Bollinger Band.
On December 12, the intraday high of HKD 11.61 was below the lower Bollinger Band (HKD 11.64), indicating oversold conditions. Trading volume expanded after December 2, reflecting diverging views among investors—some chose to sell at a loss, while others began accumulating shares at perceived bargain levels.
The market reaction to the buyback announcement was mixed. On December 16, the first trading day post-announcement, HYGEIA HEALTH closed up 3.27% but formed a bearish candlestick with a long upper shadow, suggesting heavy selling pressure. Trading volume surged 152.05% to 11.5494 million shares, indicating profit-taking under the guise of the buyback news. However, sentiment shifted dramatically on December 17, when the company confirmed the repurchase execution. The proportion of profitable positions rose from 0.45% on December 11 to 9.14% by December 17, though trading volume contracted sharply to below 5 million shares.
Subsequent sessions on December 18 and 19 saw gains of 3.78% and 1.74%, respectively, with volumes of 7.1624 million and 4.2434 million shares. This suggests renewed confidence among investors, likely driven by the company's efficient buyback execution.
Fundamentally, HYGEIA HEALTH's undervaluation and stabilizing operations provide room for a potential rebound. The 2025 interim report showed revenue from inpatient services at RMB 1.22 billion (down 18.4% YoY but up 2.1% QoQ) and outpatient services at RMB 722 million (down 11.2% YoY and 12.2% QoQ). Excluding seasonal effects, outpatient revenue remained stable, while inpatient services showed signs of recovery after last year's volatility. Patient visits held steady at 2.2 million, indicating stable demand despite DRG payment reforms impacting per-visit revenue.
The company has also optimized capital allocation, with new hospitals in Wuxi, Kaiyuan, and Qufu set to open this year. Capital expenditures dropped 28.5% YoY to RMB 242 million, and management emphasized a focus on acquisitions over new builds.
Valuation-wise, HYGEIA HEALTH's PE ratio of 15.71x is below the industry average of 17x, reflecting broader market skepticism toward private hospitals. For context, BenQ Medical Center's recent IPO priced at a mid-range PE of 29.8x, only to plunge 25.37% in gray-market trading.
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