136 — China Ruyi Holdings — enters the final days of August with its most extreme short-side configuration of the year, the week's most compelling tension being a borrow market that has quietly become one of the most expensive on the Hong Kong exchange even as shorts themselves trim positions.
The borrow story dominates this week's setup. Cost to borrow has exploded — up 260% over the past month and running at 62% annualised as of August 27, after briefly touching 105% on August 26. That intraday spike to triple digits is the kind of reading that signals forced covering or a sudden scramble for scarce supply, and availability at just 21% confirms the squeeze dynamic: roughly four shares are borrowed for every one still available to lend. A year ago availability touched a low of 7.5%, so there is room for conditions to tighten further, but the current level already sits well into constrained territory. The ORTEX short score — a composite of lending-market stress — has climbed every single day this week, reaching 96.8 on August 27, the highest reading in the trailing data window. That score ranks in the bottom percentile of the universe for short-side comfort.
Short interest itself tells a marginally different story. The absolute share count has fallen about 9.6% over the past month, from roughly 2.29 billion shares in late July to 2.07 billion now, and slipped a further 1.5% on the week. The official fortnightly FINRA-style settlement figure from August 21 puts short shares at 1.998 billion with days-to-cover near 19 — a long runway for any covering exercise. So while the borrow market is screaming stress, bears have actually been lightening rather than adding. The combination — shorts reducing exposure while the cost to borrow explodes — points to covering pressure rather than fresh conviction, with the remaining short base paying a very high price to stay in the trade.
The Street angle is thin and must be treated with care. The single analyst covering 136 carries a buy rating with a mean target of HK$2.90 — roughly double the current HK$1.43 close — but that data is 94 days old, well beyond the 14-day threshold for treating it as current. It should be noted purely as context: at some point in the recent past, at least one analyst saw material upside. Valuation multiples from the most recent filing period show the stock trading at 12.9x trailing earnings and 0.82x book, with EV/EBITDA around 6x — not stretched on paper, but the quality and momentum factor scores (ranked 5th percentile on days-to-cover and utilisation) suggest the market is not in any hurry to re-rate it higher.
The ownership picture carries one interesting wrinkle. An earnings event is now scheduled for September 2 — just days away. The top of the register is dominated by strategic holders: founder Liming Ke at 15.9%, Tencent at 15.6%, and Sunshine Insurance at 9%. None of these moved their positions in the most recent reported period. Lower down the table, BlackRock added roughly 20 million shares as of August 17, and Krane Funds Advisors — a specialist in China-theme ETFs — disclosed a full new position of 357 million shares as of July 31. JPMorgan, by contrast, cut its holding by 100 million shares as of late July, going from a meaningful position to under 129 million. The directional divergence between a passive ETF builder and a bank trimmer is a fair summary of how divided informed opinion remains.
The September 2 results announcement is the clearest near-term focal point. The two prior earnings reactions on record show a 2.7% one-day drop and an 8.1% five-day loss after the May 2026 print, and a flat-to-modestly-positive reaction in April. With borrow costs this elevated and availability this tight, the lending market's behaviour in the days immediately after that announcement — whether availability eases or tightens further — is the variable worth monitoring most closely.
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