Recently, the rapidly progressing concept of DeepSeek has greatly influenced the stock price of Hangzhou Iron and Steel Co., Ltd. (stock code: 600126). Following the release of a clarification announcement from the company, its stock price continued to surge impressively, achieving five consecutive days of price increasesThis phenomenon has left market observers both intrigued and concerned, as the company's core operations have little to do with the burgeoning field of computing power or AI technology.

Despite the electrical buzz surrounding the concept of computing power, it's crucial to note that this aspect contributes minimally to Hangzhou Steel's overall revenueIn fact, there was a notable announcement regarding the company’s primary business focus, which centers around the production and sale of steel and its processed productsThe financial performance of its main operations accounted for over 90% of the revenue, highlighting that the firm's core business would not experience any short-term changes.

As the stock surged, questions began to arise regarding the significance of the DeepSeek concept in relation to Hangzhou SteelOn February 5, the firm issued a clarification indicating that the computing power operations were managed by its subsidiaries, including Zhejiang Data Management Co., LtdIt was emphasized that the revenue from these operations was negligible, and the company's business model primarily revolved around the procurement of hardware devices and related softwareFollowing this, they provided leasing services to clients, rather than engaging in high-tech core research or development.

The media had reported on the association of DeepSeek with Hangzhou Steel in the context of software installation for greater operational efficiencyThe company clarified that the so-called "DeepSeek deployment adaptation" meant the installation of DeepSeek software within a partner's system to facilitate leasing services of computing power devices

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However, Hangzhou Steel distanced itself from any core technological developments or business relations with DeepSeek.

Despite the company's attempts to restructure the narrative and quell any speculative excitement surrounding its stock, the enthusiasm among investors only intensifiedThe share price exhibited steady increases even after the clarification, maintaining an uninterrupted rising trend in consecutive sessionsDuring a focused trading window from February 6 to February 10, data revealed that Hangzhou Steel captured an impressive trade amounting to 195 million yuan, with net purchases exceeding 38 million yuan.

On the eleventh of February, the stock continued on an upward trajectory reaching its daily price limit, marking the fifth consecutive price increase—an astounding feat that followed two prior sessions of price escalation immediately before the Lunar New YearOver these seven trading days, the stock exhibited a jaw-dropping cumulative gain of nearly 76%. However, while excitement was palpable, the company's financial forecast hovered ominously over its stock performance.

On the evening of January 14, Hangzhou Steel released its performance forecast for the year 2024, revealing a projected loss of 630 million yuanSuch projections raised eyebrows amid the rising stock prices, with investors puzzled about the potential divergence between speculative trading and actual financial performance.

In light of this projected loss, the reasons were elucidated in the company's announcementsThey cited ongoing sluggishness in the domestic steel industry as a contributing factor to the grim outlookThe broader economic environment where the steel price is experiencing significant fluctuations due to both supply chain adjustments and persistent demand-side challenges led to a general market malaise.