Many Idea Cloud (06696) saw its shares drop nearly 13% during late trading. As of the time of writing, the stock was down 12.26%, trading at HK$3.15, with a turnover of HK$18.5351 million.

The decline follows the company's announcement projecting a net loss attributable to shareholders of no less than approximately RMB 270 million for the 2025 fiscal year. This compares to a net loss of about RMB 186 million for the year ended December 31, 2024.

The expected widening of losses is primarily attributed to two factors: a decrease in gross profit margin for the 2025 fiscal year, mainly due to increased cost of sales, and a rise in administrative expenses, which includes research and development costs.

Earlier this year, after the announcement of a rights issue, Many Idea Cloud's share price defied expectations by not facing downward pressure. Instead, driven by speculative trading, it continued to climb. Within just over two months from the start of the year, the stock completed a sharp rally from "penny stock" status to a three-year high.

However, the exceptionally high trading volume on March 3 signaled a peak in market divergence. On one hand, profit-taking by earlier investors intensified at higher price levels. On the other hand, the circulation of new shares from the rights issue became a primary source of securities available for borrowing, supplying ample ammunition for the sharp sell-off on March 4 and raising concerns over potential liquidity collapse.