ObservationKingfa Sci. & Tech. manufactures and markets modified plastic products, including fire resistant resin, reinforced resin, plastic alloy, and other related products.
From a fundamental viewpoint, the financial situation of the company is fragile. We note first the high level of debt of the company: financial leverage is at 2.11x in the prior year. Plus, we note that analysts have recently revised downward forecasts of earnings per share, indicators often precursors of a fall in prices.
Graphically, the share is close to a key support area. In the last trading session the share has broken down the level of CNY 5.1, and this could lead to a fall in prices to new lows. The support would become a resistance area for the security which would be maintained at low valuation levels. Below this level, the trend should remain bearish and only a breakout would help to control the downward pressures. Therefore investors can take a sell position to enjoy of the bearish scenario. Once the position is opened, a stop loss order is placed above this level, a threshold that would invalidate the bearish strategy.
KINGFA SCI. &TECH.CO., LTD. is a China-based company principally engaged in the research, development, production and sales of new chemical materials. The Company's main products include modified plastics, biodegradable plastics, high-performance carbon fibers and composite materials, special engineering plastics, environmentally friendly high-performance recycled plastics and others. Its products are mainly applied in automotive, household appliances, modern agriculture, rail transportation, aerospace, high-end equipment, new energy, communications, electrical and electronic, as well as building decoration industries. The Company distributes its products in domestic market and to overseas markets.
KINGFA SCI. & TECH. CO., LTD. 
