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The tech-focused ChiNext Index has hit a new record high this month and remains near its peak. Despite this, shareholders of the seven leading stocks—representing over half of the index’s weight—have collectively reduced their holdings by approximately CNY32 billion (USD4.7 billion).
On May 14, the ChiNext Index climbed to 4,090, surpassing the 4,037 high set in 2015. As of 1:45 p.m. today, it had decreased by 0.2% to 4,014.79 after closing yesterday with a 2.1% rise at 4,021. The trading volume was about CNY884 billion (USD130.1 billion).
The seven companies—Contemporary Amperex Technology, Zhongji InnoLight, Eoptolink, East Money, Sungrow Power Supply, Victory Giant Technology, and TFC Communication—are leaders in sectors that have been highly popular lately, including new energy, artificial intelligence hardware, and non-bank finance.
On April 23, battery manufacturer CATL announced that Ningbo United Innovation New Energy Investment Management Partnership sold 58 million shares through a negotiated transfer. This reduced its stake to just below 5% from 6.2%, generating roughly CNY23.8 billion (USD3.5 billion) based on an estimated share price of around CNY410 (USD60.47).
Gao Guangrong, the controlling shareholder and ultimate controller of optical modules producer Eoptolink, decreased his stake from 7.4% to 6.2% after selling 11.43 million shares at CNY328 each for about CNY3.7 billion (USD544.5 million) on October 9.
Victory Giant, a printed circuit board supplier, stated that several executives sold a total of 2.37 million shares—around 0.3% of its total—at an average price of about CNY190 per share on August 4, earning approximately CNY450 million (USD66.4 million).
Market interpretation of such share reductions typically views them as assessments of stock valuation, suggesting these shares were sold because current prices might already reflect the companies’ long-term growth potential, according to Yu Fenghui, a consultant at a research center focusing on top Hong Kong-listed firms. Nonetheless, personal financial needs could also be a factor, Yu added.
These sell-offs may put some downward pressure on the stock prices of these companies. However, Yu emphasized that such occurrences are relatively common among growth stocks on the ChiNext market and are part of its self-regulation mechanism. He stressed the importance of analyzing each case individually—if a company has solid fundamentals and promising growth prospects, short-term fluctuations are unlikely to be lasting.
Some of the seven companies still reported net profits surged by around 50% in the last quarter, indicating ongoing strong fundamentals, said Li Qian, an investment advisor at Huiyan Zhitou Technology. He noted that for growth stocks on the ChiNext, this trend does not necessarily signal an imminent end to the bull market.
Investors interested in high-growth sectors should closely scrutinize individual stocks’ earnings certainty, capital efficiency, and the specific reasons behind share reductions or new issuances. It is also important to differentiate rational “normal withdrawals by industrial investors” from potential insider trading, Li advised.
Most of the sales are viewed as strategies for realizing early gains at high prices, implementing stock incentives, or fulfilling liquidity needs—rather than signs of deteriorating company fundamentals. Wen Tian’na, CEO of Boda Capital, added that many of these firms continued to experience robust growth in the first quarter, driven by strong momentum in AI computing power and renewable energy sectors. She emphasized that as long as long-term industry trends remain supportive, investors should focus more on company performance and policy backing.
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