After the earnings report was disclosed, the stock price "fell + consolidated at a low level." Why did Cofoe Medical Technology (01187) fail to see a good stock price despite higher revenue and profit?

On August 28, Cofoe Medical Technology (01187) disclosed its 2026 H1 financial report. During the reporting period, the company achieved revenue of 2.072 billion yuan, a year-on-year increase of 38.51%, far exceeding the industry average of 6.5%. Among this, the company's overseas business revenue was 210 million yuan, a year-on-year increase of 116.97%; at the same time, the company's gross profit margin improved for three consecutive years, reaching 55.89%; current net profit attributable to shareholders was 202 million yuan, a year-on-year increase of 20.84%. On the business side, ventilators, as an important product category of Cofoe Medical Technology, were the biggest highlight. The financial report shows that in Q2 of this year, the company's single-quarter ventilator sales exceeded 100 million yuan. From the perspective of secondary market performance, after intraday highs of HK$40 on July 27, Cofoe Medical Technology's H-share stock price entered a period of continuous decline, falling 16.21% cumulatively from July 27 to August 11. Subsequently, the company's stock price stopped falling and rebounded before the interim report disclosure, returning to HK$34.02 at the close on August 27. However, this financial report featuring "higher revenue and higher profit" failed to drive Cofoe Medical Technology's Hong Kong stock price to rebound further. It was observed that on the next day after the 2026 interim report disclosure, Cofoe Medical Technology's stock price closed down 3.35%, and fell 7.3% cumulatively over the following three trading days, and has moved sideways since then. Rebound on shrinking volume, insufficient follow-through As mentioned above, after moving out of the decline range from July 27 to August 11, Cofoe Medical Technology's stock price ushered in a wave of "volume-expanded breakout rebound" before the financial report. From the market performance, within this stock price range, Cofoe Medical Technology's closing price rose from HK$31.64 to HK$34.02, with a cumulative gain of about 7.52%. At the same time, it rose 5.13% in a single day on August 27, with corresponding turnover expanding to about HK$5.95 million, significantly higher than the average daily turnover of about HK$2.9 million in this range. From a technical perspective, the dominant structure in this range was a relatively typical volume-expanded breakout after bottoming on shrinking volume, switching from "weak repair" to "short-term acceleration." After three trading days of gains, Cofoe Medical Technology's closing price on August 27 had reached HK$34.02, almost touching the day's BOLL upper band of HK$34.07. Combined with fundamentals, the core logic of bullish trading at that time was the valuation repair expectation brought by the company's better-than-expected ventilator sales on the fundamental side and the high growth of the company's overseas business. However, in this volume-price rising, Cofoe Medical Technology's stock price also showed "short-term overheating" as the stock price rose rapidly. On August 27, the company's stock price failed in its volume-expanded push higher and failed to break above the BOLL upper band price, while RSI6 and KDJ-J had already shown overbought signals on the technical side, and the market showed obvious short-term pullback pressure, which also became one of the main reasons for Cofoe Medical Technology's stock price pullback from August 31 to September 3. After the stock price closed down 1.07% on September 3, Cofoe Medical Technology's stock price did not plunge all the way to the BOLL lower band, but instead rebounded successively on September 4 and September 8, fluctuating around the BOLL middle band. It is not difficult to see that Cofoe Medical Technology's closing price of HK$32 on September 14 had crossed above the 5-day and 10-day moving average prices, but the stock price was still below the 20-day moving average. At this time, however, the company's stock price deviated from the 20-day moving average by only 0.38%, and from the 60-day moving average by only about 0.4%. The small deviation may indicate that the current stage is not the end of panic selling, but rather a weak equilibrium structure under low liquidity. However, from the perspective of volume energy, from August 31 to now, Cofoe Medical Technology's average daily trading volume in the market was only about 37,000 shares, only 43.3% of the average daily trading volume of 85,500 shares from August 1 to August 28; in addition, the company's average daily turnover also dropped from about HK$2.77 million previously to about HK$1.19 million, with the corresponding average daily turnover rate falling from 0.32% to 0.14%, and the OBV range continued to decline, indicating that during this stock price rebound range, while Cofoe Medical Technology's on-market volume shrank, off-market capital follow-through was relatively weak. In other words, Cofoe Medical Technology's stock price is still in a short-term oversold repair stage. Only if the company's subsequent closing price stands above the 20-day moving average and the September 8 high of HK$32.18 could it indicate that a trend reversal is about to appear. Why did a good financial report not bring a good stock price? From the 2026 H1 financial report disclosed by Cofoe Medical Technology, "higher revenue and higher profit" was its core highlight. From the perspective of gross profit margin, thanks to the continuous optimization of product structure during the reporting period and the volume ramp-up of core single products, Cofoe Medical Technology's current gross profit margin reached 55.89%, up 3.4 percentage points year-on-year, setting a historical high. However, behind the above data, the company's current net profit margin fell from 11.16% in the same period last year to 9.78%, and further fell to 9.04% in Q2 of this year. The core reason is that the company's current selling expenses were 763 million yuan, a year-on-year increase of 58.83%. It is worth mentioning that previous financial report data show that Cofoe Medical Technology's selling expense ratio climbed from 26% in 2023 to 34.2% in 2025, and further rose to 36.8% in the first half of this year. It increased by nearly 11 percentage points over three years. This means that part of Cofoe Medical Technology's high revenue growth depends on marketing promotion, and whether it can maintain stable growth quality in the future still needs continuous verification. In terms of cash flow, Cofoe Medical Technology's net cash flow from operating activities in the first half of this year was 262 million yuan, a year-on-year decrease of 25.33%; current net increase in cash and cash equivalents was 1.056 billion yuan, mainly from the one-time contribution of HK$1.007 billion raised in the Hong Kong IPO, rather than operational improvement. When profit growth is not simultaneously converted into cash flow, the company's medium- to long-term valuation elasticity will also be suppressed to a certain extent. In addition, because Cofoe Medical Technology's H shares issued only 27 million shares, accounting for 11.45% of total share capital, of which about 9.65 million cornerstone shares are still locked until November 5 of this year. In other words, Cofoe's H shares are essentially a chip structure with low circulation, low trading volume, and high volatility. Taking southbound capital data as an example, as of September 11, southbound capital held 5.3695 million shares of Cofoe Medical Technology's H shares, accounting for 19.88% of the company's issued ordinary shares. However, limited by its relatively low free float, southbound capital also only accumulated a net increase of 130,300 shares in the past 20 trading days. Therefore, although southbound capital has allocated to Cofoe Medical Technology's H shares, under its current situation of "low issuance ratio + cornerstone lock-up period + limited southbound capital follow-through," any valuation discount or insufficient capital follow-through will be amplified by the market, thereby causing short-term price fluctuations. Overall, Cofoe Medical Technology's 2026 interim report is not entirely "fundamentally negative" for its H shares, but rather more like "good growth but insufficient conditions for valuation realization." After the financial report disclosure, the Hong Kong stock market did not directly give an H-share premium because of its current high revenue growth. Instead, against the backdrop of low liquidity, it continued to price in factors suppressing the company's medium- to long-term valuation, such as sales-expense-driven growth and cash flow weaker than profit. This may be the important reason why Cofoe's H-share stock price did not strengthen further after the earnings disclosure.