On September 4, the stock price of China’s HaroTek Technology Co., Ltd. dropped by 14.45%. Since hitting a high point on August 28, the stock price has plummeted over 160 billion yuan in market value over six trading days. Analysts believe that the recent surge in HaroTek’s stock price was primarily driven by speculative trading.
From August 28 to September 4, HaroTek’s stock price fell by 25.93%, causing its total market value to shrink from 664.3 billion yuan to 502.9 billion yuan over the span of six trading days.
According to financial news from the mainland media on September 4th, since last year, HaroTek’s stock price had surged over 15 times at one point, with its valuation having deviated from fundamental logic. The main reason behind the illogical surge in HaroTek’s stock price is primarily due to the speculation of “replacing NVIDIA.” The speculative logic behind HaroTek is to become the “replacement” for NVIDIA in the field of computing chips, emphasizing domestic independence and controllability. However, given the current competitive landscape, HaroTek remains far from challenging NVIDIA. In China, HaroTek also faces competition from Huawei HiSilicon and Cambricon Technology, placing it at a disadvantage compared to them. Additionally, HaroTek’s research and development costs are much lower than those of Cambricon Technology.
Furthermore, one major reason for the sharp increase in HaroTek’s stock price is its “scarcity.” Currently, HaroTek and Cambricon Technology are the only leading computing chip companies listed on the A-share market. However, all four major AI chip unicorns in China, including Horizon Robotics, BitMain Technologies, MoorChip, and MuXi Integrated Circuits, have entered the listing counseling stage. Once more AI chip companies go public, HaroTek’s valuation advantage in the capital market is likely to significantly weaken.
Moreover, HaroTek currently has only 40,000 shareholders. The number of funds holding HaroTek reached 562 by the end of 2024. Recently, HaroTek’s stock price briefly rose to 1595.88 yuan per share, making it unaffordable for the majority of retail investors. With more institutional investors than retail investors, once HaroTek’s stock price begins to rise, the trend will become more solid. However, if large funds lose their momentum, the stock price tends to fall without sufficient support (as retail investors are unable to sustain it), resulting in panic selling.
Netizen “隨風而來” stated, “With revenue and profits not even one-tenth of NVIDIA’s, it’s embarrassing to claim to replace them. It’s clearly a product of speculation.”
HaroTek is a limited company mainly engaged in software and information technology services, including technical development, promotion, transfer, consultation, and services. It is dubbed the “Chinese NVIDIA” in the industry.