HG SEMI showed a decent bullish wave in recent months but failed to hold the momentum at the top. Following the Pump and Dump scheme, the stock dipped down and reached its lowest level in a month. The upcoming right issue and institutions' involvement could work as a crucial price-driving factor for this stock.
HG SEMI Management Outlook
According to a submission with the Hong Kong Exchange, HG Semiconductor awarded the chosen participants 99% partnership stakes in the Employee Participation Platform on June 30.
According to the filing, the given interests represent all incentive interests according to the worker's share incentive plan.
On December 29, 2023, the company implemented an employee share incentive program. The chosen participants were allowed to informally contribute to Jiangsu Jiahong Semiconductor, a business subsidiary, and receive a portion of the company's profits via the employee holdings platform.
HG SEMI Plans For A Right Issue
According to a filing made to the Hong Kong Stock Exchange on Tuesday, HG Semiconductor plans to bring in HK$90.1 million by issuing 187,763,696 rights to shareholders on a one-for-four basis.
Rights-based shares, which will be distributed for HK$0.48 each, will represent 20% of the company's expanded issued share capital.
The issue's proceeds will be used for general financing and to enhance the company's R&D capabilities for GaN devices, LEDs, mini LEDs, and other associated semiconductor products.
Additionally, the semiconductor producer consented to use Kingkey Securities Group to hold the unsold and unsubscribed rights stocks.
HG SEMI (6908.HK) Technical Analysis
In the daily chart of HG SEMI stock, the Pump and Dump is over, as the price showed an immediate recovery from the 2.80 high. In that case, investors should monitor how the price trades at the bottom, as a bullish rebound is possible once the profit-taking is over.
Ahead of the right issue, the stock eliminated all gains from the October wave, and hovered at the crucial discounted zone. However, there is no sufficient bullish pressure is visible, suggesting that a valid bottom is not formed yet.
Based on the daily outlook of HG Semiconductor stock, investors might find a strong bullish opportunity after having a solid descending channel breakout. However, the high volume price level for the last 3 months is at the 0.840 level, which is above the current price.
A channel breakout with a daily candle above the high volume line could be a milestone for this stock, which can offer a conservative long approach towards the 1.84 high.
However, the channel resistance is still protected and a bearish continuation might appear after having a reversal from the downward trendline.
