Chinese 5G Stock Rises 1000pc in 4 Months, Only Problem: Not 5G

Chinese stock speculators are as rational as ever. They've sent a communications company's shares up 10 fold since October on 5G hype despite the company coming out and repeatedly saying it has nothing to do with 5G. This anecdote comes from an article that asks, "Can we have a healthy bull market?"

iFeng: 我们能有一个健康平和的牛市吗?
Is this wave of bullish growth a healthy bull market, or is it a wave of speculation caused by large-scale hot money and institutions? In fact, from so many monsters and pseudo-concepts, you can immediately see it. Among them, we only need to look at the leader of the current round of "Oriental Communications" to understand.

Eastern Communications continued its daily limit on the 26th. Although it opened in the middle of the session, the stock still out of the 25 daily limit in 59 trading days, becoming the most aggressive listed company in the so-called 5G concept stocks this year. From the first daily limit on November 26, 2018, to the close of February 26, 2019, in less than three months, Eastern Communications has a daily limit of 25 times in 59 trading days, and the stock price is the lowest on October 19, 2018. Starting from 3.7 yuan, it climbed to 30.67 yuan per share on the 26th, and nearly 10 times in 4 months. 4 months to achieve a 10 times share, according to reason, this should be a "great company" that has undergone tremendous changes in business and company texture!

However, this 5G concept stock, which was enthusiastically chased by the market, has repeatedly said that it has nothing to do with 5G. Even the company itself is embarrassed, and has repeatedly stood up and said that it has nothing to do with the 5G business label that the market sticks to itself! Oriental Communications' main business includes smart self-service equipment, information and communication technology services and operations, corporate networks and information security, and other industries. Dongfang Communications issued a number of risk warning announcements, saying that in the above four main businesses, the company's smart self-service equipment and other industries are not related to the construction of 5G communication network, and the company's enterprise network and information security industry related to the construction of 5G communication network are indeterminate. There is little uncertainty about the future participation of ICT services and operations in the construction and participation of 5G communication networks. The company made it clear in a risk warning to the 21st Century Herald that the above two industries “have no connection with the construction of 5G communication network” and “no operating income related to the construction of 5G communication network”.

Looking at the financial situation of Eastern Communications, it is even less optimistic. In recent years, the revenue and net profit of Eastern Communications have shown a downward trend. The only meager profit is mostly derived from non-recurring gains and losses.
The market may have finally figured this out because Eastern Communications (600776) fell 8.99 percent on Tuesday.

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