MONTAGE TECH (06809) saw its stock price plummet by 5.60% during intraday trading on Friday. The sharp decline comes despite the company recently issuing a positive profit forecast and a share buyback proposal.

The primary driver behind the sell-off appears to be news of a regulatory investigation. South Korean prosecutors conducted an on-site search and evidence collection at Montage Technology's office in South Korea on July 15. The action by the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office is related to a probe into potential violations of competition law.

While the company has stated it is fully cooperating with authorities and that neither it nor its employees have been charged with any wrongdoing, the investigation has introduced significant uncertainty for investors. Market sentiment has been negatively impacted by the potential legal and operational risks associated with the probe, overshadowing the company's strong first-half earnings guidance.