The stock price of Qingsong Health (02661.HK), a flagship company in the "AI + healthcare" sector, continues its downward spiral. It closed at HK$13.74 today (12th), setting a new record low since its listing. Looking at the daily chart, the stock has recorded 18 consecutive down days, and its weekly chart shows six straight weeks of declines, causing significant distress for earlier investors. As of today's close, the share price has plummeted over 91% from its historical peak, with its market capitalization now standing at just HK$2.836 billion, having evaporated HK$28 billion. Today's closing price also represents a 39.4% decline from its IPO price of HK$22.68.

Qingsong Health Group, formerly known as "Qingsongchou Group," was founded in November 2014. In June 2024, the group spun off its online medical crowdfunding business (Qingsongchou) and Duoer Hospital to focus on insurance brokerage and health services. In recent years, the company has continuously enhanced its artificial intelligence healthcare capabilities through its AIcare technology stack, Dr.GPT medical large language model, and QSevidence system, applying these capabilities to scenarios such as doctor services, health management, chronic disease management, insurance services, and medical institution collaboration.

Qingsong Health listed on the Hong Kong Stock Exchange on December 23 last year. Riding the wave of the "AI healthcare concept stock" trend, its share price surged nearly 159% on its debut, reaching a market capitalization of HK$12.1 billion. Over the following three-plus months, the stock price climbed steadily, hitting an intraday record high of HK$162.7 on March 27, a 6.2-fold increase from the IPO price, pushing its market cap to HK$31.4 billion.

The turning point occurred on April 20. On that day, the stock experienced a flash crash, plunging over 60% in a single session and wiping out HK$18 billion in market value, marking a significant event in the history of Hong Kong stock market flash crashes. Since then, Qingsong Health has failed to recover, with its share price embarking on a volatile downtrend lasting over two months. Despite several positive news announcements during this period, the decline was hard to halt, leaving investors who bought at high levels deeply unsettled.

Reasons Behind the Dramatic Reversal

Why has this stock, which debuted with the光环 of "thousand-fold oversubscription," experienced such a dramatic reversal within less than half a year of listing—stunning performance in the first half followed by a disastrous second half? Analysis indicates that the "rollercoaster" ride since its IPO is essentially the result of multiple negative factors converging and a comprehensive weakening of market confidence. Core reasons include the bursting of a valuation bubble, deteriorating fundamentals, a crisis of trust, and impending lock-up expiries.

Valuation Bubble Bursting

From a valuation perspective, the market initially assigned the company a high valuation by combining the popular "AI+ healthcare" theme, with its peak market cap reaching HK$31.4 billion. Based on its 2024 net profit of just RMB 10.4 million, this translated to a price-to-earnings (P/E) ratio exceeding 300x. Compared to the average P/E ratio of 20–30x for the Hong Kong healthcare sector, the stock's valuation bubble was severe. As industry hype cooled, thematic speculation receded, and the overall sector valuation framework shifted downward, the company's premium detached from fundamentals gradually dissipated, entering a phase of rational valuation correction.

Deteriorating Fundamentals

Looking at fundamentals, in 2024, Qingsong Health reported a profit of RMB 10.398 million with a gross margin of 38.3%. However, by 2025, its profitability rapidly reversed. Its 2025 revenue reached RMB 1.256 billion, a year-on-year increase of 32.9%, but profitability significantly worsened. It recorded a net loss attributable to owners of RMB 380 million, turning from profit to a substantial loss—a classic case of increasing revenue without increasing profit. Its gross margin also fell to 34.6%.

Regarding user scale, after spinning off the Qingsongchou business, the number of active users on its platform experienced a cliff-like decline, plummeting from 70.5 million in 2022 to 22.7 million in the first half of 2025—a loss of nearly 50 million users. User attrition is severe, and customer acquisition capability has weakened substantially. Furthermore, the company's revenue is highly dependent on major insurance partners, indicating high customer concentration, insufficient business resilience, and limited growth potential.

Additionally, the slower-than-expected realization of its AI concept has triggered market concerns. The market performance of its flagship AI-related products has been tepid, with insufficient investment in technology. The vision of AI empowering its core business and achieving commercial monetization has not materialized, rendering the previous growth logic built on concept stacking ineffective.

Crisis of Trust and Impending Lock-up Expiry

Just days before the flash crash, the company actually faced a market crisis of trust. On April 17, less than four months after its listing, both its Chief Financial Officer and an Independent Non-executive Director resigned on the same day. This collective change in senior management sparked strong market质疑 about internal operations and development prospects. Analysis suggests the sudden departure of core management was seen as a signal that insiders were not optimistic about the company's future, directly triggering panic selling and leading to the first round of deep暴跌, also sowing the seeds for the subsequent prolonged decline.

Furthermore, as the stock lock-up period approaches, Qingsong Health cannot escape the Sword of Damocles hanging over newly listed stocks: lock-up expiry pressure. Around June 30, the six-month lock-up periods for its cornerstone investors and controlling shareholders are set to expire, with an estimated 43 million shares (over 20% of the total share capital) becoming eligible for sale. To avoid risk, market investors are choosing to sell their holdings ahead of the lock-up expiry. Coupled with the fact that the company's public float is not particularly large, even a small amount of提前 selling can easily exert significant pressure on the share price, potentially triggering further panic selling.