On November 19, SCIENTECH (02291) hit an intraday low of HK$17.95, marking the first time its stock price fell below HK$18 since its 49.26% single-day surge on April 22 this year. Subsequent trading sessions saw further declines, with the stock closing at HK$17.20 on December 8, just shy of its recent low of HK$17.01.

The downward trend began on August 26, triggered by a major shareholder sell-off. Before the market opened that day, SCIENTECH announced that its controlling shareholder, Lepu Medical, had sold 11.14 million H-shares via block trade at HK$22.79 per share, representing 3.21% of the company’s total issued shares. The company stated that Lepu Medical remained confident in its operations and that the sale aimed to enhance stock liquidity.

The announcement sparked immediate selling pressure. SCIENTECH’s shares plunged nearly 9% within the first minute of trading and dropped over 12% within half an hour, eventually closing down 12.75% for the day. The opening price of HK$27.60 became the session’s high and a subsequent resistance level.

Technically, the August 26 sell-off dragged SCIENTECH’s stock from the upper Bollinger Band (BOLL) to the lower band, followed by a "seven-day losing streak" that widened the BOLL channel downward. Despite two brief rebounds, the lack of significant trading volume support rendered these moves "false breakouts," leading to another 11-day decline and prolonged weakness between the mid and lower BOLL bands.

Trading volume tells a similar story. While the sell-off day saw 16.16 million shares traded, average daily volume since has remained below 1 million shares, with a single-day low of just 107,000 shares. This thin liquidity reflects weak investor confidence and a wait-and-see approach among market participants.

The prolonged slump now threatens SCIENTECH’s inclusion in the Stock Connect program. The next Hang Seng Index review, scheduled for March 2026 with results announced on February 25, will assess stocks based on their average market cap from January 1 to December 31, 2025. SCIENTECH’s current average market cap of HK$6.885 billion is only HK$814 million above the HK$6.071 billion threshold. With just over 20 days left in the review period, avoiding sharp volatility could help it retain its status—but failure to rebound may keep "delisting risks" in play.

**Centralized Procurement: Opportunity or Threat?** The sell-off followed another critical development: On August 19, Sichuan and Inner Mongolia initiated data collection for centralized procurement of structural heart defect occluders. By October 22, Fujian’s医保局 released a draft procurement plan, and on November 12, it formally announced a nationwide alliance-led tender for such devices, covering all provinces.

This marks the largest-ever centralized procurement for structural heart occluders, with participation mandatory for all hospitals that used these devices in 2024. Historical precedents suggest price cuts could range from 33% to 65%, though recent tenders show moderating declines.

For SCIENTECH, congenital heart defect occluders contributed 48.7% of its H1 2025 revenue (HK$161 million, up 24.8% YoY). The procurement outcome could thus significantly impact its earnings—favorable terms may boost market penetration, while steep cuts could squeeze margins.

Currently, the stock’s low trading volume underscores market caution. The impending tender results may serve as a pivotal turning point for SCIENTECH’s trajectory.