Hengyi Petrochemical (000703) Limit-Up Reasons and Future Market Analysis

Hengyi Petrochemical (000703.SZ) hit the limit-up on December 2, 2025, with a closing price of RMB8.21 and an increase of 10.05% [0]. The core driving factor is the share purchase plan announcement issued by the controlling shareholder Zhejiang Hengyi Group and its concerted actors: they plan to purchase RMB1.5-2.5 billion worth of the company’s shares using their own funds and a RMB2 billion special loan from December 2,2025 to June1,2026, with the purchase price not exceeding RMB10 per share [4].

Price and Trading Volume: On the limit-up day, trading volume reached 127.01 million shares, which is 5.58 times the average daily trading volume of 22.78 million shares [0], verifying the market’s strong response to this positive news. Short-term Trends: Over the past5 days and1 month, the stock has risen by20.56% and22.54% respectively, mainly driven by news. During the same period, the petrochemical sector fell by0.70%, so this is not driven by sector trends [0].

1. Signal Effect of the Share Purchase Plan
   : The controlling shareholder’s large-scale share purchase (up to RMB2.5 billion) and the price ceiling of RMB10 per share clearly convey confidence in the company’s future, providing an expectation of short-term support for the stock price [4].
2. Disconnect Between Fundamentals and Market Performance
   : The company currently has a high P/E ratio of949.16 times, ROE of only0.12%, net profit margin of0.03%, and its revenue in the first three quarters decreased by11.53% year-on-year [0][3]. The short-term limit-up is more driven by sentiment rather than fundamental improvement.

• Overvaluation: The P/E ratio is much higher than the industry average, and fundamentals are difficult to support it [0].
• Uncertainty in Share Purchase: Need to pay attention to the implementation of the plan; if the progress or amount is lower than expected, the stock price may correct [4].
• Weak Fundamentals: Limited improvement in profitability and insufficient long-term growth momentum [3].
• Liquidity Pressure: Current ratio of0.63 and quick ratio of0.40 indicate short-term liquidity strain [0].

• The maximum purchase price of RMB10 per share provides a short-term target for the stock price; if market sentiment continues, there may be further upside potential.

Hengyi Petrochemical’s this limit-up is directly driven by the controlling shareholder’s share purchase plan, with positive market sentiment and expanded trading volume. However, the company has prominent issues such as overvaluation and weak fundamentals; attention should be paid to the implementation of the share purchase plan and changes in fundamentals. Investors should objectively evaluate the impact of the event based on their own risk tolerance.