Zhejiang Shibao Co. Ltd. faces a sharp pull‑back after a rally of more than a month

Zhejiang Shibao Co. Ltd. (HK: 01057.HK, A‑share 600838.SS) has seen its share price slide dramatically in the final minutes of the 22 December 2025 session. After a surge that had the stock reaching a new eight‑year high and posting a 10 % gain in the first 10 minutes of trading, the shares were hit by a sudden reversal. By the close, the price had fallen to 3.7 % lower than its opening level, a 5.7 % intraday drop, and the 10‑minute gain had been largely erased.

Trading dynamics

  • The 22 December session was marked by a wave of “涨停” (limit‑up) activity across the market, with 73 stocks reaching their upper price limit in the morning and 92 in the first half‑day.
  • Zhejiang Shibao, a leading supplier of hydraulic steering systems and rack‑and‑pinion units, had been trading at the upper price limit for the past four days, building a five‑day consecutive limit‑up streak.
  • In the last 10 minutes of the session, the stock was traded for 1.3 billion yuan, with the price retreating by almost 4 % before closing at 3.7 % below its opening level.

Contextual backdrop

The broader market was buoyant in the early part of the day. The Shanghai Composite Index recovered the 3,900‑point threshold, and the ChiNext index rose over 2 %. Several sectors—particularly those linked to autonomous driving, smart cities, and high‑performance computing—led the rally. Zhejiang Shibao’s performance was in line with the sector’s overall momentum, but the late‑day pullback indicates a potential correction or a shift in investor sentiment toward riskier themes.

Company fundamentals

  • Industry: Automobile components – steering and steering‑system parts.
  • Key products: Hydraulic power recirculating ball steering, steering boosters, rack‑and‑pinion steering units, and control valves.
  • Market cap: 1.10 billion HKD.
  • Price‑to‑earnings ratio: 20.3, reflecting moderate valuation relative to peers in the consumer discretionary sector.
  • Recent performance: The stock’s 52‑week high of 6.48 HKD (dated 24 June 2025) and low of 2.49 HKD (dated 8 April 2025) show a wide range of volatility. Its closing price on 18 December 2025 was 5.09 HKD.

Investor implications

The sudden decline suggests that, while the market remains optimistic about the autonomous‑driving theme, there may be a tightening of risk appetite as the session draws to a close. The liquidity spike—1.3 billion yuan in three minutes—points to a sharp re‑evaluation by traders, possibly driven by concerns over valuation levels after a prolonged rally.

For holders, the episode underscores the importance of monitoring intraday volatility, especially in sectors that are sensitive to policy signals and regulatory announcements. For those considering entry, the post‑pullback levels could offer a more attractive valuation relative to the recent high, provided the company’s fundamentals remain sound and the broader macro‑environment continues to support the autonomous‑driving narrative.