Analysis of Kosen Technology (603626) Limit-Up: Short-Term Breakout Driven by Asset Sale and Performance Improvement

Kosen Technology (603626) surged to the daily limit-up on January 16, 2026, closing at RMB 22.42 with a 10.01% increase and a turnover of RMB 352 million. The company’s current total market capitalization is RMB 12.44 billion, and its stock price has just broken through the 52-week high. From a multi-dimensional analysis, this limit-up is the result of a resonance between asset disposal gains, performance improvement expectations, and market sentiment [0][1].

is the most important catalyst for this limit-up. Kosen Technology plans to sell 100% equity stake in its wholly-owned subsidiary Kosen Medical for RMB 915 million, with an evaluation appreciation rate of 206.45%, which is expected to bring approximately RMB 600 million in investment gains to the company [1][2]. This transaction amount is equivalent to about 7.3% of the company’s market capitalization, significantly improving its financial position. The company clearly stated that the proceeds from the sale will be used for investment in emerging businesses, reflecting its strategic intention to divest non-core assets and focus on high-growth tracks.

provides fundamental support. According to the company’s forecast, it expects a full-year loss of RMB 245 million to RMB 330 million in 2025. Although it remains in a loss-making state, the loss has narrowed by 30.79% to 48.62% year-on-year [3]. More notably, the company’s net cash flow from operating activities in the first three quarters surged 118.12% year-on-year, and the loss narrowed by 50.9% year-on-year, indicating that the operating quality is gradually improving [1].

. The company is transforming from traditional metal manufacturing business to hot sectors such as consumer electronics and robot structural components [2]. Although the company has clarified that it “does not directly produce robot products” and the revenue from structural components for robots accounts for only about 1%, the market still has high expectations for its development in cutting-edge concept fields such as AI glasses and robots. In 2024, the company was sought after by capital due to solid-state battery and foldable screen concepts, and its stock price hit the limit-up for ten consecutive trading days [4]. The continuation of this market attention provides an emotional basis for the current market trend.

In terms of price performance, Kosen Technology shows obvious trending upward characteristics. Its recent performance is particularly strong: a 12.10% increase in 5 days, a staggering 69.98% increase in one month, a 68.83% increase in three months, a 172.09% increase in six months, and a 191.93% increase in the past year [0]. This sustained sharp rise indicates that the market has strong expectations for the improvement of the company’s fundamentals.

Trading volume data shows that 15.7 million shares were traded on the day, with a turnover of RMB 352 million, but the volume-to-average ratio is only 57%, indicating that there was no significant expansion in trading volume when the stock hit the limit-up [0]. This characteristic of “price rising while volume shrinking” usually indicates that shareholders have a strong reluctance to sell, and the market’s bullish expectations are relatively consistent. However, it is also necessary to be vigilant that this volume-less limit-up may mean that off-market funds have insufficient willingness to chase high prices. If there is no supporting trading volume in the follow-up, the limit-up may face the risk of opening.

Technical indicators show a mixed pattern of bulls and bears. The MACD has no death cross signal, leaning bullish, and the KDJ indicator with K value 78.4 and D value 75.2 forms a golden cross, also leaning bullish. However, the RSI (14) has entered the overbought zone, and attention needs to be paid to short-term callback pressure from a risk warning perspective [0]. The beta coefficient of 0.72 shows that the stock has relatively small fluctuations compared to the market, and has a certain defensive attribute in the current market environment.

There is obvious divergence in the current market towards Kosen Technology. Bulls believe that: the asset disposal gains are highly certain, which will significantly improve the financial position; the substantial improvement in operating cash flow reduces liquidity risks; after recouping funds from the sale of the medical business, the company can focus on hot tracks such as consumer electronics and robot structural components; despite the sharp rise in stock price, the PB ratio of 5.8 times is still somewhat attractive in the manufacturing industry.

Bears believe that: the company is expected to still report a loss of RMB 245 million to RMB 330 million in 2025, and the fundamentals have not reversed; the main business faces pressure from market demand fluctuations, with low capacity utilization; high R&D expenses continue to pressure net profit; the previous price increase has a large speculative component, and the company has clarified that it is not directly involved in the manufacturing of robots or AI glasses [4].

From the perspective of sector sentiment, the industrial sector rose only 0.56% today, while the technology sector fell 1.01%, providing limited support at the sector level [0]. This means that Kosen Technology’s limit-up is driven more by its own factors rather than the overall rise of the industry sector.

. The transferee of Kosen Medical’s equity is Kunshan State-owned Capital Investment Group, a related party. This arrangement may mean that the transaction is highly certain, but it has also sparked discussions about the fairness of the transaction pricing. The evaluation appreciation rate of 206.45% is at a relatively high level in similar transactions, and investors need to pay attention to whether there is suspicion of profit manipulation in the follow-up.

is the biggest current risk. The stock price has risen 191.93% in the past year, while the company’s performance is still in a loss-making state, with a PE ratio of -34.57 times. This situation of “stock price rising while losses continue” is obviously unsustainable. Once market expectations are disappointed or the expansion of new businesses falls short of expectations, the stock price may face a sharp adjustment.

. The company recently abolished the board of supervisors and revised the articles of association, simplifying the decision-making process, and revised a total of 23 governance systems [1]. Although this is an easily overlooked positive, the optimization of the governance structure is of great significance to the company’s long-term development and investor protection.

remains high. The company has been losing money consecutively, with an expected loss of RMB 245 million to RMB 330 million in 2025, and its performance has not yet achieved a real reversal. The one-time gains from the asset sale are unsustainable, and the profitability of the company’s main business still needs to be verified by the market.

needs to be vigilant. The 191.93% increase in one year far exceeds the speed of performance improvement, and the current stock price may have over-reflected future expectations. If the progress of new business expansion falls short of expectations, there is a large room for valuation correction.

cannot be ignored. The company has clearly clarified that it does not directly produce robots or AI glasses, and the previous popularity driven by hot concepts is speculative. When market sentiment cools down, the stock price may fall rapidly.

deserves attention. The company’s current ratio is 0.80, and the quick ratio is 0.62, with tight liquidity [0]. If the improvement trend of operating cash flow cannot be sustained, the company may face capital pressure.

: the RSI has entered the overbought zone, and there is short-term callback pressure. As the 52-week high, the price of RMB 22.42 may need a pullback confirmation after the breakout.

If the company can successfully obtain orders for robot or AI glass structural components, it will provide substantive support for its business transformation. The consumer electronics and robot industries are in a high boom, and related businesses are expected to become new profit growth points. In addition, if more asset disposal or strategic cooperation news is released in the follow-up, it may drive the stock price to rise further.

Based on current information, a scenario analysis of Kosen Technology’s subsequent trend is conducted:

. If new business orders are secured or performance exceeds expectations, the stock price is expected to break through the resistance level of RMB 23.76 and challenge the integer range of RMB 25-26.

. Without major positive or negative stimuli, the stock price may consolidate in the range of RMB 20.33-23.76, digesting the recent gains by trading time for space.

. If negative performance news ferment or market sentiment cools down, the stock price may pull back to the support level of RMB 20.33, or even test the support around RMB 18.

: Resistance Level 1 is RMB 22.42 (today’s limit-up price, already broken through), Resistance Level 2 is RMB 23.76 (next target); Support Level 1 is RMB 20.33 (short-term support), Support Level 2 is RMB 18.50 (mid-term support) [0].

Kosen Technology’s limit-up today is the result of the combined effect of asset sale gains, narrowed performance losses, and expectations of strategic transformation. The company has obtained approximately RMB 900 million through the sale of Kosen Medical, providing financial support for business transformation, but it should be noted that this is a one-time gain, and the profitability of the company’s main business has not yet achieved a real reversal. Technically, it shows a breakout pattern but with overbought RSI, and there is short-term callback pressure. From an investment perspective, it is more suitable to focus on the progress of the company’s new business expansion and the actual landing of orders, rather than chasing high prices based on concept speculation. It is recommended that investors remain rational and wait for signals of real performance improvement before considering mid-term layout.