Impact Analysis Report on Major Shareholder's Share Reduction Event of KeyHitech (688356.SS)

Based on the comprehensive analysis above, I now present to you the complete investment research report:

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According to the company announcement on January 9, 2026, Wu Kaiting, a shareholder holding more than 5% of KeyHitech’s shares, plans to reduce his holdings of the company’s shares by no more than

, accounting for no more than of the company’s total share capital, due to his personal capital arrangements[1][2][3].

Item	Details
Shareholding Reduction Shareholder	Wu Kaiting (Shareholder holding more than 5% of shares)
Current Shareholding	7.9328 million shares, accounting for 13.08% of total share capital
Planned Reduction Quantity	No more than 1.8195 million shares
Reduction Ratio	No more than 3% of total share capital
Reduction Method	Centralized Auction (≤1%) + Block Trading (≤2%)
Reduction Period	Within 3 months after 15 trading days from the announcement disclosure date
Source of Shares to Be Reduced	Pre-IPO shares of the company (restrictions lifted on August 28, 2023)

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KeyHitech’s current price-to-earnings ratio (PE) is as high as

, which represents a compared to the average PE of approximately 25x for the specialty chemicals industry[0]. Against this high valuation backdrop, any share reduction by a major shareholder may trigger the market to re-examine the valuation.

Valuation Indicator	KeyHitech	Industry Average	Deviation Range
Price-to-Earnings Ratio (PE)	157.39x	25.0x	+529.6%
Price-to-Book Ratio (PB)	4.71x	2.5x	+88.4%
Price-to-Sales Ratio (PS)	24.42x	2.0x	+1121%

• Reduction Amount
  : Based on the current stock price, the value of the shares to be reduced is approximately
  RMB 184 million
• Market Impact Cost
  : Considering the 3% reduction ratio, it is expected to bring
  1.5%-3%
  selling pressure on the short-term stock price
• Valuation Regression Risk
  : The average pullback range of high-valuation companies after a share reduction announcement is approximately
  5%-10%
  [1]

According to academic research, the impact of major shareholders’ share reduction on a company’s mid-term valuation is mainly reflected in the following aspects[1]:

1. Information Signal Effect
   : Share reduction by major shareholders is usually regarded as an implicit signal of the company’s future development prospects, and the market will re-evaluate the company’s value
2. Change in Chip Structure
   : A share reduction of over 23% (3% reduction / original 13.08% shareholding) by a shareholder holding more than 5% of shares will significantly change the shareholder structure
3. Institutional Position Adjustment
   : Institutional investors may re-evaluate their position strategies, leading to passive position reduction

Examining KeyHitech’s long-term valuation from a fundamental perspective[0]:

• Financial Health
  : Conservative accounting policies, low debt risk (low leverage ratio)
• Liquidity Status
  : Current ratio of 9.68, quick ratio of 8.39, extremely strong liquidity
• Profitability
  : Net profit margin of 15.48%, operating profit margin of 16.02%

: If the company’s fundamentals continue to improve, the long-term impact on valuation will be limited; however, the current valuation has fully reflected optimistic expectations, and the share reduction may become a catalyst for valuation regression.

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Against the current market backdrop, the share reduction announcement may trigger the following emotional reactions[2]:

• “Voting with Feet” Signal
  : Share reduction by major shareholders is often interpreted by the market as confirmation of the company’s overvalued stock price
• Expectation of Increased Supply
  : 3% of shares released to the market increases stock supply
• Interpretation of Profit Locking
  : As one of the founding shareholders, Wu Kaiting’s share reduction may be regarded as early profit locking

Data from the A-share market shows that within 5 trading days after the announcement of a major shareholder’s share reduction plan, the company’s stock price falls by an average of approximately [2], but the degree of impact is closely related to the company’s fundamentals and market environment.

It is worth noting that KeyHitech’s stock price has performed strongly recently[0]:

Time Period	Increase	Market Position
Past 5 Days	+22.53%	Significantly outperforms the broader market
Past 1 Month	+22.78%	Strong upward trend
Past 1 Year	+92.38%	Significantly exceeds the industry average

: Publishing a share reduction announcement after a sharp price increase can easily be interpreted by the market as “cash out at a high level”, which may amplify the impact of negative sentiment.

Technical analysis shows[0]:

Indicator	Status	Interpretation
RSI(14)	Overbought Risk Zone	Short-term pullback demand exists
KDJ	Bullish	Mid-term trend remains bullish
MACD	Bullish	Upward momentum remains
Support Level	$85.49	Potential target level for pullback
Resistance Level	$103.40	Short-term upward pressure level

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Impact Dimension	Short-Term (1-4 Weeks)	Mid-Term (1-3 Months)	Long-Term (6+ Months)
Stock Price Performance	Under pressure to pull back 1.5-5%	Valuation regression and consolidation	Returns to fundamentals
Valuation Level	PE compression	Seeking a new equilibrium	Depends on performance
Market Sentiment	Bearish-leaning, increased volatility	Gradually stabilizes	Returns to neutral
Trading Volume	Increases by 30-50%	Returns to normal	Stable
Institutional Positions	Passive position reduction	Position adjustment and stock rotation	Reallocation

Scenario	Assumptions	Expected Stock Price Change	Probability Assessment
Optimistic Scenario	Fundamentals continue to exceed expectations + stable market sentiment	-2% ~ +3%	30%
Neutral Scenario	Normal company operations + market absorbs the impact of share reduction	-5% ~ -2%	50%
Pessimistic Scenario	Market interprets it as performance concerns + follow-up selling	-15% ~ -5%	20%

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1. Hold and Wait
   : The 3% reduction ratio is relatively controllable, so there is no need for panic selling
2. Pay Attention to Support Level
   : If the stock price pulls back to around $85.49, consider increasing holdings
3. Track Fundamentals
   : Pay close attention to subsequent performance announcements and business development

1. Wait for a Better Entry Point
   : The current valuation is relatively high, and the share reduction may provide a better entry opportunity
2. Build Positions in Batches
   : If you are optimistic about the company’s long-term development, you can adopt a fixed investment strategy
3. Set Stop-Loss
   : It is recommended to set a stop-loss level below $85.49

• Valuation Pullback Risk
  : The current PE of 157x is far higher than the industry average, so there is a risk of value regression
• Market Sentiment Risk
  : The A-share market is highly sensitive to major shareholders’ share reduction
• Liquidity Risk
  : The liquidity of the STAR Market is relatively weaker than that of the main board
• Performance Verification Risk
  : It is necessary to continuously pay attention to whether the company’s performance can support the high valuation

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The event where Wu Kaiting, a major shareholder of KeyHitech, plans to reduce his holdings by no more than 3% of the shares, against the backdrop of the company’s current

and , constitutes a for the company’s valuation and investor sentiment.

1. Valuation Impact
   : Under pressure in the short term, valuation regression and consolidation in the mid-term, long-term depends on fundamentals
2. Sentiment Impact
   : Bearish-leaning in the short term, time is needed to absorb the impact of the share reduction
3. Reasonable Expectation
   : The short-term pullback range of the stock price is approximately 3-8%, and it will fluctuate and consolidate in the range of $85-$105 in the mid-term
4. Investment Strategy
   : Existing shareholders are advised to hold and wait, while potential investors can wait for a better entry opportunity

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[0] Gilin API Data - KeyHitech (688356.SS) Company Profile, Stock Price Data, Technical Analysis and Financial Analysis

[1] Eastmoney - KeyHitech: Shareholder Wu Kaiting Plans to Reduce Holdings by No More Than 3% (https://wap.eastmoney.com/a/202601093614277184.html)

[2] CFI.net.cn - Breaking News: Share Reduction Plan by Shareholder Holding More Than 5% of Shares (https://www.cfi.net.cn/p20260109000848.html)

[3] Sina Finance - KeyHitech: Shareholder Wu Kaiting Plans to Reduce Holdings by No More Than 3% (https://finance.sina.com.cn/roll/2026-01-09/doc-inhftcfr0473731.shtml)

[4] Guancha.cn - The A-share market just turned bullish, and listed company shareholders are busy reducing holdings? Don’t misinterpret it… (https://www.guancha.cn/economy/2024_10_09_751132.shtml)

[5] Tsinghua University Research Center for Financial Non-Performing Assets - Regulatory Reversal and Value Exploitation: Research on the Final Share Reduction Returns and Impacts of Venture Capital (http://cfrc.pbcsf.tsinghua.edu.cn)