On October 14, 2026, HIPINE (02583.HK) issued a voluntary announcement stating that controlling shareholder Li Linmao sold 100,000 company shares through on-exchange trading on the Hong Kong Stock Exchange that same day at an average price of HK$45.63 per share, representing approximately 0.17% of total issued shares and raising about HK$4.563 million in cash. Following the reduction, Li Linmao's holdings fell from 6.6 million shares to 6.5 million shares, with the shareholding ratio declining from approximately 11.22% to approximately 11.05%; the concert party group's combined holdings decreased from approximately 50.49% to approximately 50.32%, still maintaining controlling shareholder status.
The scale of this reduction is not large in itself, but the timing deserves attention. HIPINE listed on the Main Board of the Hong Kong Stock Exchange on September 30, 2025, and the lock-up period for controlling shareholders and pre-IPO shareholders expired on September 29, 2026. Li Linmao's reduction occurred only about two weeks after the lock-up expired.
Boundaries of the "6+6" Lock-Up Rule
HIPINE's controlling shareholder lock-up arrangement follows the "6+6" rule under Rule 10.07(1) of the Hong Kong Listing Rules. Under this rule, controlling shareholders must comply with a two-stage lock-up undertaking: the first stage covers the first six months after listing, during which no shares may be sold; the second stage covers the six months following the expiry of the first stage, during which shares may not be sold to the extent that the shareholder ceases to be a controlling shareholder. Specifically for HIPINE, the first-stage lock-up expired on March 29, 2026, and the second stage ended on September 29, 2026. The two stages together total 12 months, fully consistent with the "lock-up undertaking until September 29, 2026" disclosed in the announcement.
This means that Li Linmao's reduction on October 14 took place within a legally fully compliant window, and the concert party group's combined holdings still exceeded 50% after the reduction, not triggering the red line of "ceasing to be a controlling shareholder." But compliance does not mean the market will accept it calmly. The shares involved in this lock-up expiry accounted for approximately 87.51% of HIPINE's issued shares, representing a massive unlock. The controlling shareholder initiating a reduction so soon after the lock-up expiry, even if small in scale, could be interpreted by the market as a signal of intent.
The Stock's Rollercoaster Ride: From HK$216 to HK$44
To understand the market implications of this reduction, one needs to look back at HIPINE's share price trajectory over the past year. HIPINE's offer price was HK$29.6 per share, and its opening price on the first day of listing reached HK$74.25. On January 27, 2026, the stock hit an intraday historical high of HK$216. At that time, the market's valuation of HIPINE was built on multiple narratives including gold, smart wearables, national trend culture, and traditional craftsmanship, and the company, as the "first pure gold watch stock," possessed a certain scarcity value in the Hong Kong stock market.
After the peak, the stock began a sustained decline. By mid-September, as the lock-up expiry date approached and selling pressure expectations intensified, HIPINE fell about 30% cumulatively in the two weeks since September 7, touching an intraday low of HK$41.72 on September 28, nearly halving from its monthly high. As of the October 16 close, HIPINE's stock price was HK$45.00, down nearly 80% from its historical high of HK$216. Based on the average reduction price of HK$45.63, Li Linmao's cash-out amount corresponds to a price level after the stock had already fallen nearly 80% from its peak.
Divergence Between Fundamentals and Valuation
It is worth noting that HIPINE's stock decline was not entirely due to deteriorating fundamentals. For the full year 2025, the company's revenue grew 33.8% year-on-year to RMB 610 million; in the first half of 2026, revenue growth slowed to 15.9% but still maintained double-digit growth. Profitability was even more impressive: the net profit margin was 16.7% in 2025 and further rose to 29.7% in the first half of 2026, up about 10 percentage points year-on-year. The gross profit margin improved to 41.6% from the year-earlier level, putting it on par with Laopu Gold.
But the market's pricing logic has changed. Zhang Yi, CEO of iiMedia Research, pointed out that HIPINE's previous high valuation was mainly built on the stacking of multiple concepts, and current financial data "to some extent cannot support the previous narrative." As market sentiment cools and capital shifts toward AI and other technology sectors, the pricing focus for Hong Kong consumer stocks has shifted from "growth stories" to "ability to deliver on earnings and sustainability of growth." A comparable data point: as of October 16, HIPINE's price-to-earnings ratio was approximately 15.7 times, while Laopu Gold's P/E ratio had dropped to approximately 7 times. HIPINE's valuation remains higher than comparable targets, meaning that if the pricing logic for the consumer sector continues to shift toward "earnings delivery," its valuation still has room for further adjustment.
Signal Significance of the Reduction
Returning to the 100,000-share reduction itself. From an absolute scale perspective, the HK$4.56 million cash-out is negligible for a company with a market capitalization of approximately HK$2.6 billion. But its signal significance lies in the timing. Just two weeks after the lock-up expiry, the controlling shareholder initiated a reduction, and chose to complete it through on-exchange trading rather than seeking institutional buyers through block trades. On-exchange reductions mean shares flow directly into the secondary market, having a more direct immediate impact on the stock price.
After the reduction, HIPINE's stock price closed at HK$44.42 and HK$45.00 on October 15 and 16 respectively, essentially flat against the average reduction price, with no dramatic market reaction—this may be because the reduction scale itself was small, or because the market had already anticipated it. What truly deserves attention is what comes next. Li Linmao's holdings fell from 6.6 million shares to 6.5 million shares, leaving ample room for further reduction. The concert party group's combined holdings exceed 50%, still about 40 percentage points away from the red line of "ceasing to be a controlling shareholder." If the stock price continues to hover at low levels, whether the controlling shareholder will further reduce its stake, and how the pace and scale of any further reductions change, will be important variables for observing HIPINE's subsequent stock price movements.
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