Shares of CICC (China International Capital Corporation), a leading Chinese investment bank, plummeted by 5.42% on Wednesday, October 31st, 2024. The stock's decline was likely driven by two key factors:
Firstly, CICC's portfolio company, smartphone maker Honor (a former Huawei unit), announced that it had received an undisclosed investment from partners including China Telecom and a unit of CICC Capital Corp. This suggests that CICC may be diluting its stake in Honor as the company raises funds from other investors, which could potentially impact CICC's valuation of its existing investment in Honor and weigh on its future returns from the smartphone maker.
Secondly, CICC reported a disappointing financial performance for the third quarter of 2024. The company's profit attributable to shareholders fell by 39.8% year-over-year to 630.1 million yuan, while operating revenue declined by 10% to 4.54 billion yuan compared to the same period last year. This weak financial performance may have further dampened investor sentiment towards CICC's stock.
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