XUNLONG SCITECH (06715) staged a sharp rebound during Friday morning trading, surging more than 12% after a prolonged decline that began when the stock was included in the Stock Connect program on September 7. The shares had fallen approximately 17% during that period. At the time of writing, the stock was trading up 10.31% at HK$69, with turnover reaching HK$31.6 million.

The rally comes on the heels of the company's first-half results, which showed revenue of RMB 362 million, representing a year-on-year increase of 20.01%. Adjusted net profit rose 15.7% to RMB 209 million. The revenue growth was primarily driven by robust sales of its caviar products, which saw volumes increase by 23.0% to 140,367 kilograms. This growth was fueled by sustained expansion in mature markets such as Europe and the United States, along with strong demand from Asia-Pacific regions including Japan, South Korea, and Singapore.

Analysts at Kaiyuan Securities highlight a clear supply-demand mismatch in the caviar industry. Supply faces natural and structural constraints that are difficult to address quickly, while demand benefits from deep-rooted consumption traditions in overseas mature markets. Economic growth and wealth effects are continuously creating new incremental markets, and with domestic penetration rates still low and consumption scenarios expanding, overall demand is showing a pattern of broad-based and steady growth.

Where the opportunity lies

With supply growing slowly and demand expanding steadily, this long-term imbalance is expected to drive both volume and price increases across the industry. This dynamic also strengthens the pricing power of leading players, positioning XUNLONG SCITECH favorably to capitalize on these trends.