DeepTech's sharp seven-day decline finally halted on March 17, when its shares pared an intraday loss exceeding 2% to close at HK$45.7, marking a 3.86% gain and temporarily ending the extreme sell-off.
As the former record-holder for Hong Kong IPO oversubscription and a pioneer in AI application stocks, DeepTech recently experienced its most severe stock volatility since listing. Despite dual positive catalysts—inclusion in the Hong Kong Stock Connect program and an upbeat profit alert—the company's shares failed to rally as expected. Instead, they nearly halved in just seven trading sessions.
The sharp downturn began on March 6, when DeepTech hit an intraday high of HK$120 before rapidly reversing. By the close on March 16, the stock had plunged to a low of HK$42.26. Over the seven sessions from March 6 to March 16, the cumulative decline reached 64.78%, with particularly steep drops of 17.9% on March 10 and 15.60% on March 12.
At its debut, DeepTech was a star IPO in the Hong Kong market. The company listed on the Main Board of the Hong Kong Exchange on October 28, 2025, as a Chapter 18C Specialized Technology Company. During its public offering, it achieved over 7,500 times oversubscription, raising more than HK$270 billion, not only topping the charts as that year's most oversubscribed IPO but also ranking among the highest oversubscription multiples in the history of Hong Kong Main Board listings. On its first trading day, the stock surged over 150% above its issue price of HK$26.66, reflecting intense market enthusiasm.
Ironically, the steep decline coincided with the simultaneous materialization of multiple positive developments for the company. On March 6, DeepTech issued its first positive profit alert since listing, forecasting 2025 revenue between RMB4.01 billion and RMB4.25 billion, representing year-on-year growth of 65% to 75%, and a significant narrowing of its adjusted net loss by 65% to 75%. On the same day, the Shanghai and Shenzhen stock exchanges announced DeepTech's inclusion in the Hong Kong Stock Connect, effective March 9.
Market analysts noted that while inclusion in the Stock Connect typically enhances liquidity and attracts southbound capital from mainland China, it often prompts short-term profit-taking. Prior to the program's implementation, DeepTech's shares had already rallied substantially, leading some early investors to cash out upon the news, creating concentrated selling pressure. On March 9, the very day the Stock Connect took effect, the stock fell 9.44%.
Despite short-term pressure, DeepTech's fundamental growth momentum remains intact. Revenue growth is primarily driven by its FastAGI enterprise-grade AI solutions business, which saw a surge of over 175% year-on-year in 2025. The company is also achieving replicable AI applications across sectors such as consumer retail, manufacturing, healthcare, and transportation.
However, robust revenue growth has not yet resolved the company's profitability challenges. According to disclosures, DeepTech anticipates a net loss between RMB905 million and RMB965 million for 2025. The company has reported significant losses consecutively from 2022 to 2024, with cumulative losses over the past four years exceeding RMB30 billion. The coexistence of high revenue growth and persistent losses remains a key factor in market valuation assessments.
At the industry level, enterprise-grade large model AI applications are gaining attention from both policy support and market demand. IDC data indicates that China's enterprise AI services market reached RMB45.6 billion in 2025, with a compound annual growth rate of 38.2%. However, competition is intensifying. In 2024, DeepTech held a 4.2% market share, ranking fifth in China's enterprise large model AI application solutions market, with giants like Baidu, Alibaba, and SenseTime also commanding significant positions.
Notably, DeepTech's decline was not indicative of broader sector weakness. During the same period, the Hong Kong market overall saw more gains than losses, with the AI sector buoyed by events like Nvidia's GTC conference and Meta's increased AI computing investments. The Hang Seng Tech Index rebounded above 5,100 points, highlighting the pronounced independent volatility of individual stocks.
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