After being added to the Stock Connect list on September 7, shares of LONGBIO-B (01779) experienced a notable decline. On the day of inclusion, the stock closed down 10.31%. While it rebounded 6.01% the following day, the subsequent period saw five consecutive losing sessions, bringing the cumulative drop over seven trading days to 27.65%. Following this sharp correction, the stock has recently shown signs of recovery. From September 16 to 18, the stock posted three consecutive gains, a short-term rebound from lower levels. Whether this marks the start of a trend reversal has become a key focus for investors both on and off the exchange.

Why has southbound capital failed to support the stock price after index inclusion? Looking at the recent price action of LONGBIO-B, the inclusion day clearly stands out as a pivotal moment. On September 7, the updated Stock Connect list took effect, adding 54 stocks and removing 15. The first day of trading did not bring broad gains across the newly included names. Only 12 of the 54 stocks closed higher, while the remaining 42 declined, with an average drop of 6.62%. LONGBIO-B's performance was slightly worse than this average, suggesting its decline was not an isolated move but rather influenced by broader market sentiment.

From a trading perspective, most investors appear to have treated the inclusion date as a moment to lock in gains rather than a fresh catalyst. In fact, 44 of the 54 newly included stocks have posted positive returns year-to-date, with an average gain of 101.85%. Although LONGBIO-B, as a newly listed stock, lacks a full year of price data, its share price had already climbed from HK$105.2 at the close on August 19 to HK$128.0 by September 4, a rise of 21.67% over that period. Trading activity also picked up notably, with a clear volume-driven advance on August 27 and turnover expanding to HK$35.265 million on September 4. This phase of rising prices accompanied by increasing volume indicates that the market had already priced in expectations of improved liquidity from index inclusion, along with the earlier BLA acceptance and pipeline progress highlighted in prior financial reports.

The significant volume and sharp decline on September 7 reflected the concentration of profit-taking from earlier Stock Connect and BLA-related positioning. Core to the price action from September 7 to 15, however, was not the single-day drop itself but the failure to stage a second rally after the rebound attempt on September 8, which instead gave way to a steady decline. In terms of volume, following turnover of HK$161 million on September 7, LONGBIO-B still saw HK$97.79 million in turnover on September 8. But as the share price kept falling, turnover consistently shrank, dropping to just HK$10.53 million by September 15—a classic pattern of declining volume amid a downtrend. This suggests that buying interest at lower levels was not aggressive during this period.

Even though LONGBIO-B had been added to the Stock Connect, newly arrived southbound capital—in terms of scale, timing, and approach—was insufficient to counteract the selling pressure in the stock at that time. Data shows that on September 7, southbound net purchases of LONGBIO-B amounted to approximately HK$108 million, accounting for about 67% of total turnover that day, yet the stock still fell 10.31%. This indicates that southbound funds did not provide meaningful price support that day, reflecting stronger selling pressure in the market. Excluding the two days of spiked trading volume on September 7 and 8, southbound net buying from September 9 to 15 totaled roughly HK$67.48 million, against stock turnover of about HK$131 million, with net purchases representing around 51.6% of turnover. Correspondingly, the value of southbound holdings in LONGBIO-B rose from approximately HK$98.56 million on September 9 to HK$160 million by September 15, an increase of about HK$61 million. During this period, southbound holdings as a share of outstanding shares climbed from 1.15% to 2.30%, yet the stock price still hit new lows. This suggests that southbound capital had not yet adopted a trend-following stance of actively adding positions on declines, but rather acted as value-oriented buyers providing support at lower levels. For an 18A biotech company like LONGBIO-B, while such buying can slow the pace of decline in the short term, it remains insufficient to reverse a bearish trend.

After the oversold rebound, when will the next upward cycle begin? From a technical standpoint, following seven consecutive days of sharp declines, LONGBIO-B finally saw three days of rebound. From September 16 to 18, the stock gained 7.80%, with turnover expanding to HK$16.8 million and turnover rate rising to 0.22% on September 18, signaling clearer signs of buying interest at lower levels. However, taking a longer view, the stock remains in a recovery phase after the sharp selloff, and a new major upward move has yet to begin. On the technical charts, although the share price has reclaimed the 5-day and 10-day moving averages, it still trades below the 60-day and 20-day moving averages. The narrowing bearish MACD histogram indicates waning downside momentum, but the DIF and DEA lines remain below the zero line, meaning the medium-term bearish structure has not reversed. The RSI reading of around 46 has not yet entered the strong zone, and the closing price of HK$105 on September 18 remains in the lower half of the Bollinger Bands, within a weak recovery range, with no breakout above the upper band yet.

On the volume side, September 18 saw 163,400 shares traded, higher than the previous session and above the 109,400 average daily volume over the prior five days. This suggests the session was not merely a low-volume rebound but involved incremental capital participating in a bottom-fishing move. Even so, this volume remains far below the 1.2877 million shares traded on September 7 and 817,800 on September 8. In other words, the current rebound volume should be seen as "repair-level" rather than "reversal-level." A key catalyst that could drive the stock from recovery to reversal in the near term may lie in the BLA review progress for its core product LP-003 mentioned in the interim report. On August 20, the CDE website showed that the listing application for LONGBIO-B's self-developed LP-003 injection had been formally accepted, with the proposed indication being seasonal allergic rhinitis (SAR). This marks the company's first Class 1 innovative biologic drug advancing toward commercialization.

LP-003, an anti-IgE antibody with a novel sequence design, works by binding with high affinity to free IgE in the blood and tissues, blocking its interaction with the high-affinity receptor FcεRI, thus cutting off the IgE-mediated allergic cascade at its source. Positive head-to-head data in a Phase II trial for chronic spontaneous urticaria, showing superiority over omalizumab, further strengthens the case for LP-003's differentiated potential. From a market perspective, allergic rhinitis is a non-infectious chronic inflammation of the nasal mucosa, with over 246 million patients in China. Although intranasal corticosteroids and second-generation antihistamines represent the standard first-line treatment, approximately 60% of patients with moderate-to-severe disease face inadequate symptom control, leaving substantial unmet clinical needs. If approved, LP-003 would become the first innovative anti-IgE antibody drug to reach the market globally in over two decades since omalizumab, potentially tapping into the vast domestic allergic disease treatment market. Recent institutional commentary has highlighted LP-003's best-in-class potential, suggesting that revenue flexibility for the company would emerge from LP-003 commercialization starting in 2027. At the secondary market level, once LP-003's approval is confirmed, the transition from a clinical asset to a commercialized product could drive a valuation shift for LONGBIO-B from a "zero-revenue, unprofitable" company to one with "commercial validation," potentially accelerating improvements in its short-term technical structure and volume-price dynamics.