Cathay Education (1935.HK): Drivers and Analysis of Hong Kong Stock Surge

Cathay Education (ticker: 1935.HK; note: the original input of 01935.HK was a typo) belongs to the Consumer Defensive - Education and Training Services sector. On December 4, 2025, its closing price was $0.82, up 1.23% on the day[0]. The core driver for the stock to enter the Hong Kong Stock Surge List is the

: On December 1, 2025, its peer education stock Dashan Education (09986.HK) was ordered to suspend trading by the Securities and Futures Commission due to suspected financial fraud[1][2][3], triggering short-term capital redistribution within the sector. Cathay Education, with its (P/E 4.21x, P/B 0.37x) and (net profit margin 28.37%, ROE 9.04%)[0], has become a potential choice for capital seeking a margin of safety.

Price and volume analysis shows that Cathay Education has risen 1.23% cumulatively over the past 5 days, but its trading volume on December 4, 2025 was only 6,000 shares, far lower than the average volume of 159,901 shares[0], indicating that the upward momentum is not driven by large capital inflows. Regarding key price levels: the short-term support level is the recent low of $0.70 (52-week low[0]), and the resistance level is the recent high of $1.29 (52-week high[0]).

1. Sector Risk Preference Shift
   : The financial fraud incident of Dashan Education has disrupted the capital balance in the education sector; investors are shifting from high-risk stocks to financially stable, low-valued targets, and Cathay Education has become a rotation choice due to its fundamental advantages.
2. Volume-Price Divergence Warning
   : The divergence between extremely low trading volume and rising stock prices indicates insufficient market participation; the current uptrend may only be a short-term capital fluctuation, lacking capital support for sustained growth[0].
3. Valuation Repair Potential
   : The P/E of 4.21x and P/B of 0.37x are at low levels in the industry; combined with the 28.37% net profit margin[0], it has value investment appeal. If trading volume increases subsequently, there is room for valuation repair.

• Insufficient Volume Risk
  : The trading volume on the day was only 3.7% of the average level[0]; the uptrend without sufficient capital support may be unsustainable.
• Sector Correlation Risk
  : If the Dashan Education incident triggers a downward adjustment of the overall valuation of the education sector, Cathay Education may be affected[1][2][3].
• Information Asymmetry Risk
  : No direct catalyst for Cathay Education itself has been found; the current uptrend may only be short-term capital rotation.

• Value Investment Opportunity
  : Stable financial indicators (net profit margin 28.37%, ROE 9.04%[0]) may attract the attention of value investors.
• Continued Sector Rotation
  : If capital in the education sector continues to gather towards low-valued, high-quality targets, Cathay Education is expected to receive sustained attention.

• Company and Sector
  : Cathay Education (1935.HK), Consumer Defensive - Education and Training Services sector.
• Price and Changes
  : Closing price of $0.82 on December 4, 2025; up 1.23% on the day and 1.23% cumulatively over the past 5 days[0].
• Surge Drivers
  : Dashan Education (09986.HK) was suspended due to financial fraud, triggering capital rotation in the education sector; Cathay Education’s low valuation and strong fundamentals made it a capital choice.
• Key Price Levels
  : Short-term support at $0.80 (opening price on November 28, 2025[0]), short-term resistance at $0.83 (recent high[0]), long-term psychological level at $1.00.
• Notes
  : Extremely low trading volume, casting doubt on the sustainability of the uptrend; need to monitor the overall dynamics of the education sector and changes in its own trading volume.