Following yesterday's outbreak, A-shares experienced another comprehensive eruption today, with the market soaring at the open, the Shanghai Composite Index reclaiming the 2,900-point mark, and over 5,200 stocks turning red.

However, there is another scene unfolding: Shenzhen Huaqiang, which had 16 limit-up days in the previous 17 days, is accelerating its decline.

On September 25th, Shenzhen Huaqiang's stock price fell by more than 8% during the trading day, competing with Datang Telecom for the top spot on the decline list.

The eruption of speculative stocks cannot be separated from hot spots.

At the end of July this year, some media reported that HiSilicon, a subsidiary of Huawei, will hold its first All-Connection Conference on September 9th, where it will release multiple HiSilicon chips covering various application scenarios such as audio and video, HarmonyOS, and StarFlash.

HiSilicon, a chip company under Huawei, had fallen into a trough a few years ago due to U.S. sanctions, and naturally, the announcement of the All-Connection Conference has attracted great attention.

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The previously released business performance showed that Huawei HiSilicon's business has fully recovered since the beginning of 2023.

In the fourth quarter of 2023, HiSilicon's chip shipments reached 6.8 million units, a year-on-year increase of 5121%, and its revenue soared by 24471% for the quarter; in the first quarter of this year, Huawei HiSilicon's chip sales broke through 8 million units, returning to the top five globally.

Relying on its independently developed advanced chips such as Kirin, Kunpeng, and Ascend, HiSilicon has not only returned to the center of the global chip industry but also driven Huawei's performance to fully recover.

In 2023, Huawei's revenue reached 704.2 billion yuan, a year-on-year increase of 9.63%, setting the largest annual increase since 2019, with a net profit of 87 billion yuan, a year-on-year increase of up to 144.5%; in the first half of this year, Huawei's performance growth continued to accelerate, with the company achieving a revenue of 417.5 billion yuan, a year-on-year increase of 34.3%, and a net profit of about 55.11 billion yuan, a year-on-year increase of 18.2%.

There are also market rumors that HiSilicon may follow the independent model of Huawei's vehicle BU in the future, becoming a global supplier like Qualcomm and NVIDIA.

This means that the development and mass production capabilities of HiSilicon's chips may exceed expectations.

With HiSilicon standing at the forefront, the market naturally has to dig out concept stocks for speculation, and Shenzhen Huaqiang, which is also in Shenzhen, has become the "chosen one."

Shenzhen Huaqiang is one of the largest agents of HiSilicon, representing products including smart TV chips, display driver chips, and AI chips, making it a genuine HiSilicon concept stock.

At the same time, the company has also responded quickly to hot spots, stating that as HiSilicon continues to launch new products, the company will increase the research and development and promotion of HiSilicon's product application solutions, promoting the market expansion of HiSilicon's products.

This statement has further attracted market attention.

The unique equity structure also makes Shenzhen Huaqiang a candidate for speculative stocks.

Data shows that Shenzhen Huaqiang's total share capital exceeds 1 billion shares, but 740 million shares are in the hands of the controlling shareholders and their concerted action persons, with only about 300 million shares in actual circulation, and the actual market value before the start is less than 3 billion yuan.

In terms of short-term momentum, Shenzhen Huaqiang is indeed unparalleled among HiSilicon's concept stocks, but in terms of long-term quality, it is another scene.

Shenzhen Huaqiang's main business revolves around electronic components, and the company currently has three major business segments: authorized distribution of electronic components, industrial internet of electronic components, and physical transaction market of electronic components and electronic terminal products.

The distribution of electronic components is the most important source of revenue for the company, and the agency of Huawei HiSilicon's chips belongs to this part of the business.

In 2023, Shenzhen Huaqiang's electronic component distribution business revenue reached 18.018 billion yuan, accounting for 87.49% of the total revenue, making it the "big brother" in the field of electronic component distribution in China.

As a HiSilicon concept stock that has been speculated by the market, Shenzhen Huaqiang has not disclosed relevant business data with Huawei HiSilicon, but from the past performance changes, it can be seen to some extent how much HiSilicon has affected the company.

Shenzhen Huaqiang became HiSilicon's agent distributor through the acquisition of Qinuo Technology in 2017.

Over the next six years, although the company's overall revenue has doubled, the more important net profit has changed very little.

Becoming a HiSilicon distributor seems to have not helped Shenzhen Huaqiang earn more money.

Since the first quarter report of 2023, Shenzhen Huaqiang's net profit has continued to decline for six consecutive quarters, and in the last four quarters, it has even increased revenue without increasing profits.

In the second quarter of this year, Shenzhen Huaqiang achieved a revenue of 5.921 billion yuan, a year-on-year increase of 22.97%; the net profit attributable to the parent company was 119 million yuan, a year-on-year decrease of 15.79%.

Perhaps due to HiSilicon's strong position causing the company's bargaining power to decline, Shenzhen Huaqiang's electronic component distribution business's gross margin has plummeted from 11.59% to 6.61%, and the continuous decline in gross margin has dragged down the company's profitability.

In the future, the development of new HiSilicon businesses will require a lot of capital, but the support that Shenzhen Huaqiang's capital can provide is limited.

The controlling shareholder Huaqiang Group's interest-bearing debt in 2023 was as high as 36.6 billion yuan, of which short-term debt was 23.7 billion yuan, and the same period's monetary funds were only 6.2 billion yuan, with a short-term debt stock fund gap as high as 17.4 billion yuan.

In order to raise funds, the listed company even faces the risk of being bled by the major shareholders.

Therefore, even if the stock price soars, Shenzhen Huaqiang has not forgotten to remind investors that the promotion progress of HiSilicon's new products is uncertain, and the impact on the company's performance remains to be observed.

The recent short-term increase in the company's stock price is significantly deviating from the market trend, and there is a risk of overheating in the market sentiment.

Huawei's influence in the capital market needs no further explanation, with more than 800 A-share concept stocks riding on Huawei, and Shenzhen Huaqiang is not the first listed company to see its stock price soar by piggybacking on Huawei.

In June 2021, before and after Huawei released the HarmonyOS system, a stock called Runhe Software instantly became a speculative stock, with its stock price soaring nearly seven times in just over two months.

Faced with the subsequent attention letter from the Shenzhen Stock Exchange, Runhe Software replied that the company is one of the initiators of the open HarmonyOS and a co-builder of Huawei's HarmonyOS ecosystem, seemingly trying to prove the rationality of the stock price surge.

However, the reality is not as optimistic as imagined.

HarmonyOS brought almost negligible revenue to Runhe in 2021, and Runhe's net profit even declined by 40% in 2022.

The script of relying on HarmonyOS to make a counterattack did not come true, and the stock price also fell sharply from a high position by nearly 60%.

On August 29, 2023, the day Huawei started selling the Mate 60 series of mobile phones, another speculative stock, Jie Rong Technology, began to soar.

In less than a month, Jie Rong Technology, relying on the concept of being a Mate 60 supplier, pulled out 16 consecutive limit-up days, with an interval increase of more than five times.

The market at that time focused on speculating on Jie Rong, in addition to the company's low market value, another reason may be that Huawei once ranked as the first major customer of Jie Rong Technology, and the revenue from Huawei once accounted for nearly 50%.

In fact, Huawei became Jie Rong's first major customer nine years ago, and after 2017, the revenue contributed by Huawei has fallen below 10%.

In 2021, 2022, and the first half of 2023, the proportion of Huawei's revenue in the company's business income was 0.46%, 3.48%, and 3.70%, respectively.

The nonsensical market speculation often comes and goes in a gust of wind, and after just a month of rising, Jie Rong's stock price began to continue to fall, and the current distance from the high point has also fallen by more than 60%.

Shenzhen Huaqiang, which has suddenly soared by taking advantage of HiSilicon's heat, also has a long-term logic that is not strong enough.

The historical experience of the global industrial economy shows that the long-term biggest beneficiary of the growth and development of a hardware giant must be the upstream component suppliers, not the downstream product agents.

This is the case from the early Apple industry chain to the recent Tesla and NVIDIA industry chains.

For super brands, agents are even less likely to dominate, and may even be replaced by the brand's own channels in the end.

From this perspective, the growth and development of Huawei HiSilicon, the real beneficiaries in the A-shares are the upstream suppliers, not the downstream agents, and the future performance of Shenzhen Huaqiang is also difficult to show a rapid growth momentum like the fruit chain leader such as Luxshare Precision or the NVIDIA industry chain leader such as InnoLight Technology.

In addition to the stock price adjustment risk brought by the easy falsification of performance, the risk of selling by the controlling shareholders cannot be ignored.

Public information shows that among the 740 million shares held by Shenzhen Huaqiang's controlling shareholders, 330 million shares are used as collateral for exchangeable bonds.

The exchangeable bond has now entered the exchange period, and the stock price of Shenzhen Huaqiang after the surge has far exceeded the exchange price.

Once these shares enter the secondary market for reduction through the exchange method, it will undoubtedly have a greater impact on the stock price.

On September 9th, the rumored Huawei HiSilicon All-Connection Conference did not cause any waves on the Internet, and Shenzhen Huaqiang also opened high and went low, with two consecutive limit-down days.

This kind of emotional speculation comes and goes quickly.

After the event's good news is realized, the future stock price of Shenzhen Huaqiang will still return to the logic of performance-driven.