Analysis of the Strong Performance of Hongxiang Co., Ltd. (300427): Policy-Driven Short-Term Surge and Risk Warnings

This analysis is based on a report from Sina Finance [4], published on January 19, 2026. Hongxiang Co., Ltd. entered the strong stock pool due to its strong performance on that day. The stock rose by over 15% intraday, with active trading and extremely high market attention.

On January 15, State Grid announced that fixed-asset investment during the 15th Five-Year Plan period is expected to reach

, a 40% increase compared to the 14th Five-Year Plan, with an annual investment of approximately 800 billion yuan [4]. This major policy signal directly ignited the smart grid sector, and related stocks were widely sought after by capital. State Grid clarified that the investment will focus on the construction of a new power system, with cross-regional and inter-provincial power transmission capacity expected to increase by over 30% compared to the end of the 14th Five-Year Plan, focusing on supporting the development and transmission of clean energy bases such as “desert, gobi, and barren land (Shagehuang)” and large-scale hydropower in Southwest China.

Hongxiang Co., Ltd. has appeared on the Dragon and Tiger List

[1]. Data on January 16 shows that the closing price was 15.62 yuan, with an increase of 11.33%, a turnover rate as high as 40.36%, a transaction volume of 3.187 billion yuan, and a net inflow of 84.3757 million yuan from main capital [1]. Frequent appearances on the list reflect sustained attention from main capital, but also indicate intense chip turnover.

The North American market is driven by both the aging and renewal of power grids and the electricity demand of AI data centers, leading to a surge in exports of power equipment. From January to November 2025, China’s transformer exports increased by 35.3% year-on-year, high-voltage switch exports increased by 29.4% year-on-year, and wire and cable exports increased by 22.9% year-on-year [4]. As an electrical equipment supplier, Hongxiang Co., Ltd. theoretically benefits from the expansion of external demand.

Time Horizon	Price Change	Evaluation
Single Day	+15.17%	Strong Breakout
5 Days	+40.00%	Accelerated Rise
1 Month	+31.99%	Trend Continuation
3 Months	+218.97%	Huge Increase
52 Weeks	+215.06%	Top Stock of the Year

The current price of 17.99 yuan has broken through the 52-week high of 18.48 yuan (the intraday high hit during the trading session), forming a technical breakout. The 20-day moving average is at 13.44 yuan, and the 50-day moving average is at 11.36 yuan. The stock price is far from the short-term moving average system, creating a demand for regression. The resistance level of 18.48 yuan (52-week high) has been tested. The first support level is the integer mark of 17.00 yuan, and the strong support levels are 14.13 yuan and the 20-day moving average at 13.44 yuan.

Today’s trading volume is

, with an average daily trading volume of 108 million shares, representing a in volume, and the turnover rate exceeds 40%. The extremely high turnover rate indicates high chip dispersion, and some profit-taking orders have been executed.

Capital Type	Net Inflow (10,000 yuan)	Interpretation
Main Capital	+8,437.57	Continuous Buying
Retail Capital	+718.73	Follow-Up Buying
Hot Money	-9,156.3	Profit-Taking

The capital structure shows a typical pattern of “main capital pulling up, hot money taking profits, and retail investors taking over”, which requires vigilance.

Indicator	Value	Signal Interpretation
MACD	No Death Cross	Bullish in the Medium Term
KDJ	K:77.9, D:68.4, J:96.8	Severely Overbought
RSI(14)	Overbought Zone	Short-Term Overheating
Beta Coefficient	0.4	Low Correlation with the Market

• Trend Score: 4.0/5.0
• Buy signal appeared on January 8
• Moving average system shows a bullish arrangement
• ADX indicator confirms trend strength
• Price broke through the 20-day and 55-day moving averages
• Trading volume matches well

: The medium-term uptrend remains intact, but short-term overbought conditions are severe, with the J-value at 96.8 in an extreme zone. Historical data shows that this situation is often accompanied by a short-term pullback. A Beta value of only 0.4 indicates that the stock has a low correlation with the market trend, making it suitable as a sector allocation target rather than a core holding.

Indicator	Value	Industry Comparison
P/E (Price-to-Earnings Ratio)	-38.33x	Loss-making (most companies in the sector are profitable)
P/B (Price-to-Book Ratio)	7.15x	Significantly Overvalued
P/S (Price-to-Sales Ratio)	13.53x	Significantly Overvalued
ROE	-19.24%	Loss-Making Status
Net Profit Margin	-35.30%	Loss-Making
Current Ratio	2.81	Strong Short-Term Solvency
Debt Risk	Low	Controllable Financial Risk [3]

Reporting Period	EPS (yuan)	Revenue (100 million yuan)
Q3 2025	+0.08	1.90
Q2 2025	+0.01	1.82
Q1 2025	+0.03	1.14
Q4 2024	-0.59	1.90

The company has achieved profitability for 4 consecutive quarters, and a preliminary performance inflection point has emerged. However, it should be noted that the TTM (trailing 12 months) remains in a loss-making state, and profitability has not yet fully returned to normal levels.

Hongxiang Co., Ltd. is mainly engaged in the R&D and production of RF/microwave devices, components, and subsystems, with microwave products covering a frequency range from DC to 40GHz. It also involves power equipment and testing service businesses. The company’s business covers military and civilian sectors, but the proportion of military business and specific customer information have not been disclosed in detail.

The current P/B ratio of 7.15x and P/S ratio of 13.53x are significantly higher than the average level of the electrical equipment industry, and the stock price increase (218.97% in 3 months) has deviated greatly from fundamental support [0]. For a company that is still in a loss-making state, the current valuation lacks sufficient fundamental basis.

There are market rumors that the company supplies goods to SpaceX Starlink and the “Qianfan Constellation”. The company

on the interactive platform on January 19: as of now, it does not supply goods to the above-mentioned projects [3]. Investors should be highly vigilant against deviations between market hype and the company’s actual situation, and avoid being trapped by chasing highs due to concept speculation.

The KDJ indicator’s J-value reaches 96.8, RSI is in the overbought zone, coupled with a turnover rate of over 40%, leading to a high risk of short-term pullback. The net outflow of 91.56 million yuan from hot money indicates that some short-term capital has taken profits [1].

Although the quarterly profit trend has improved, the company’s TTM remains in a loss-making state, and the sustainability of profitability recovery needs to be verified. If future quarterly performance falls short of expectations, the current high valuation may face a sharp correction.

Time Horizon	Judgment	Reason
Short-Term (1-3 Days)	⚠️ Pullback and Consolidation	Overbought + Hot Money Profit-Taking + Excessively High Turnover Rate
Medium-Term (1-4 Weeks)	📈 Fluctuating Uptrend	Sustained Policy Benefits + Performance Improvement + Sector Popularity
Long-Term	⚠️ Performance Verification Required	Overvaluation + Profitability to be Restored

Price Type	Price (yuan)	Significance
Strong Resistance	18.48	52-week high, has been tested
First Support	17.00	Integer Mark
Second Support	14.13	Key Moving Average Support
Strong Support	13.44	20-Day Moving Average

: This round of rise is mainly driven by three factors: policy benefits, sector rotation, and capital speculation, and the fundamental improvement trend has not yet been fully reflected in performance. The current increase is already large, so it is recommended that investors remain cautious:

• Investors who already hold positions can set a stop-loss level at 14 yuan and hold for observation; sell decisively if the price breaks below this level
• Investors who do not hold positions are advised to wait for a pullback to below 15 yuan before entering, to avoid chasing highs
• Position control is particularly important; it is not advisable to overweight such high-volatility targets
• Pay attention to subsequent changes in trading volume; if volume continues to shrink, upward momentum will weaken

The strong performance of Hongxiang Co., Ltd. (300427) is the result of the superposition of three factors:

. State Grid’s 4 trillion yuan investment plan provides a long-term positive foundation for the smart grid sector, and the company’s quarterly profit improvement trend also provides certain fundamental support for the stock price. However, the current valuation level has significantly deviated from fundamentals, coupled with factors such as severe short-term overbought technical indicators and profit-taking by hot money, investors need to be alert to the risk of short-term pullback.

From a medium-term perspective, if the company’s profitability can continue to recover, coupled with the gradual realization of policy benefits, the stock price still has room to rise. However, given the large current increase, it is recommended that investors remain rational, wait for a more appropriate entry opportunity, and do not blindly chase highs.