On the evening of December 1, JXR (01951) announced a plan to repurchase shares worth no less than HK$100 million, stating that its "current trading price does not reflect its intrinsic value or the company's actual business prospects." Since hitting a temporary peak on July 29 this year, JXR's stock price has been on a volatile downtrend, reaching a year-low of HK$2.33 on November 24. Over a longer timeline, this marks the fifth consecutive year of decline, with the stock plummeting nearly 90% from its 2021 high of HK$23.79. The buyback announcement at this juncture is clearly aimed at boosting market confidence.
**Southbound Capital Bets on Bottom-Fishing: Is the Buyback a "Profit Signal"?** As mentioned, JXR's stock has been in a downward channel since July 29. After a sharp drop below the Bollinger Bands (BOLL) upper band on July 29, the stock briefly rebounded by over 15% in five trading days, only to face exhaustion on August 18 with a long upper shadow. From August 19, JXR entered a nearly 13-day losing streak, with shrinking daily trading volumes indicating weak market participation and persistent selling pressure.
By early September, the stock stabilized but remained trapped in a narrow, low-volume range, failing to achieve a meaningful technical breakout. Even after touching the BOLL upper band on November 13, the stock retreated 2.33% the next day and logged six consecutive declines, revisiting the lower band on November 21.
Despite the prolonged slump, JXR's status as a Stock Connect constituent triggered buying interest from southbound capital. Over the past 60 days, top sellers included Goldman Sachs, HSBC, Guozheng International, Huatai Financial Holdings, and Nanyang Commercial Bank, offloading 87.6 million, 33.17 million, 11.22 million, 7.32 million, and 5.03 million shares, respectively. Meanwhile, Stock Connect channels from Shanghai and Shenzhen emerged as the top net buyers, acquiring 75.06 million and 71.82 million shares. Since September, Stock Connect ownership in JXR has risen significantly, reaching 53.83% by December 1. Notably, in the recent rebound, southbound capital deviated from its typical "buy-the-dip, sell-the-rally" approach, adding 27.12 million shares in five days.
**Buyback as a Prelude: Strong Fundamentals Needed for Sustained Recovery** On December 2, Giant Biotech's HK$104 million buyback announcement spurred a 13% intraday surge. In contrast, JXR's stock rose just 1.63% post-announcement and dipped 1.6% the next morning, disappointing some investors.
Technically, after three months of declines, JXR's stock is in a weak zone with heavy overhead supply. The average cost basis stands at HK$2.86, and only 14.92% of positions are profitable. Trading volume growth has been sluggish, suggesting cautious participation and weak momentum for a sustained rebound.
To bolster sentiment, JXR CEO Dong Yang stated on December 3 that the company plans to allocate HK$300–400 million annually for buybacks or dividends starting in 2026, potentially yielding a 5%–6.5% return at current prices.
However, beyond buybacks, improving fundamentals is critical. JXR's mid-2025 results revealed a 10.7% revenue drop to HK$1.288 billion and a net loss of HK$1.04 billion (versus a HK$190 million profit a year earlier). Adjusted net profit fell 68.3% to HK$82.3 million, weighed down by: 1. Declining volume and pricing in core IVF services—8% fewer egg retrieval cycles and a 7%–8% drop in average revenue per cycle due to insurance cost controls; 2. Lower birth rates, cutting traditional deliveries by nearly 25% and dragging down maternity-related income; 3. Higher costs from new business investments; 4. One-time impairments on U.S. and Laos assets.
Multiple analysts have downgraded JXR's 2025–2027 forecasts. BOCOM International slashed revenue estimates by 17%–18%, adjusted net profit by ~50%, and cut its target price to HK$3.30, rating it "Neutral." CLSA also adopted a neutral stance, trimming revenue and net profit forecasts by 12%–20% and 27%–31%, respectively, and lowering its target to HK$3.50.
Still, JXR expects H2 2025 to improve as headwinds ease. Q3 data showed IVF cycle declines narrowing to 5.2% (from 8.3% in H1), hinting at operational recovery. Investors now await year-end results for confirmation.
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