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Stock manipulation: Kingfa Science & Technology India
Earlier known as Hydro S&S Industries, Kingfa Science & Technology India (KSTI) manufactures modified plastics and engineering plastics. In May 2013, China’s plastic manufacturer Kingfa Sci & Tech Co picked up 66.5% stake in KSTI at 2.5 times the market price. The parent company currently holds 75% shares of KSTI. For the year ended March 2016, KSTI reported a revenue of Rs314 crore, up 43% from Rs219 crore reported for the same period a year ago. But KSTI has struggled to generate much profit. For FY15-16, its net profit amounted to a mere Rs10.80 crore. However, over the past three years, the stock moved up a humongous 7850% or nearly 79 times, from a low of Rs11.77 on 25 April 2013 to Rs935 on 15 July 2016. The current price is an extraordinary 88 times its earnings per share (trailing 12 months). With borrowings of Rs75 crore on 31 March 2015, the debt:equity ratio is as high as 9.23.
 
Will the Securities and Exchange Board of India (SEBI) investigate whether the upmove was due to the optimism of investors or is someone trying to rake up the price artificially? 

User

COMMENTS

Mohan Sivanand

10 months ago

In a nation where such manipulation is quite common, it is only good journalism to question anything that looks suspicious. While I defend the right of some of the other readers here to question this story, I can only see Moneylife bravely doing its duty by warning investors to be careful. And that is one big reason why I read Moneylife. Recently I have seen another stock, Shriram Pistons, racing up. But you and I can't buy it and on some days as many as just 15 stocks were traded. That has increased now to a few hundred. It hits a new 52-week high every day. Could there be a small group of sellers and buyers playing with this stock?

SATINDER GOEL

10 months ago

Please provide some evidence why you think price is manipulated. When stocks like Flipkart can command valuation of 200 USD per share...why KINGFA with innovation and latest state of the art technology offerings can not command a price of 20 USD odd . Why can not your investigative journalists find out if anything wrong with the company before you rely on SEBI ?

REPLY

Kamal Babaria

In Reply to SATINDER GOEL 10 months ago

i agree to your words mr goel.

Kamal Babaria

10 months ago

kingfa is the subsidiary of world leader kingfa china.earlier hydro s &s was not doing well and hence the price was abyssmal.kingfa took over this company and began the operation under new name .the debt as on date is zero.kingfa has planned 500 cr capex expansion for india project.the product usage consumption of kingfa is abyssmally low as compard to other countries and has the potential for huge growth.
the mcap @1000 cr with [email protected] and ever increasing ,doesnt seem to be a price rigging.the potential of future growth itself may demand such premium.

Abhishek Kedia

10 months ago

I don't know whether SEBI has a dedicated team for such activities, but surely some equity investors on twitter mention about them and on there blog, they have more then 10k followers, SEBI should track there buy/sell activity two and punish on the same. Investors or retail investors just go by herd mentality and then stuck in high price which never comes again and they loose their hard earned money.

Sandeep Das

10 months ago

Ya I agree with Dulip. Stock turning out to be 88 bagger does not necessarily mean its manipulated. The debt of 75 crore reduced substantially as well. Right now the stock is expensive but valuations are also catching up and earnings will do the same as well. Also there is a huge expansion plan and the untapped market in India for its core product is huge and all this is factored in the current price of Kingfa

Sandeep Das

10 months ago

Ya I agree with Dulip. Stock turning out to be 88 bagger does not necessarily mean its manipulated. The debt of 75 crore reduced substantially as well. Right now the stock is expensive but valuations are also catching up and earnings will do the same as well. Also there is a huge expansion plan and the untapped market in India for its core product is huge and all this is factored in the current price of Kingfa

Sandeep Das

10 months ago

Ya I agree with Dulip. Stock turning out to be 88 bagger does not necessarily mean its manipulated. The debt of 75 crore reduced substantially as well. Right now the stock is expensive but valuations are also catching up and earnings will do the same as well. Also there is a huge expansion plan and the untapped market in India for its core product is huge and all this is factored in the current price of Kingfa

Sandeep Das

10 months ago

Ya I agree with Dulip. Stock turning out to be 88 bagger does not necessarily mean its manipulated. The debt of 75 crore reduced substantially as well. Right now the stock is expensive but valuations are also catching up and earnings will do the same as well. Also there is a huge expansion plan and the untapped market in India for its core product is huge and all this is factored in the current price of Kingfa

DULIIPTMEHTA

10 months ago

Just because price went up 8000℅ in 3 years , can not be reason for manipulations. You must substantiate with facts and figures to help your readers to be alert from such co.

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