SUGP shorts retreat sharply as borrow costs remain elevated

SU Group Holdings Limited enters May with a striking divergence: short sellers have been rapidly covering, yet the cost to borrow remains extraordinarily high for a stock this size.

Short interest has more than halved since late March. SI % of free float peaked near 10.7% on March 23 and has since collapsed to 4.2% — a decline of roughly 36% in the past week alone, and 57% over the past month. In absolute terms, short positions dropped from around 50,000 shares to just under 20,000. That pace of covering is unusual for a micro-cap name with light trading volumes.

The borrow picture tells a more complex story. Despite the sharp reduction in short positions, cost to borrow remains deeply elevated at 92% annualised — expensive by almost any standard. The dramatic context: CTB was above 400% as recently as February, and only broke below 100% in mid-April. The current level reflects a borrow market that has loosened considerably but is still far from cheap. Availability, on the other hand, is loose — the ratio of shares still available to lend versus shares already borrowed sits above 4,000%, meaning the lending pool is not the constraint here. Short sellers who remain have financing costs as their primary headache, not supply.

The ORTEX short score has drifted to 51 this week, down from 55 just ten days ago. That move reflects the significant cover wave rather than any fresh bearish conviction. The days-to-cover reading ranks in the 88th percentile, a mechanical reminder that even a small position could take several sessions to unwind fully in a stock this thinly traded. With a market cap of approximately $2.4 million, SUGP is a genuinely micro-cap name where even modest short flows register as large percentage moves.

Ownership is tightly concentrated. Ming Chan alone holds 63.6% of shares outstanding, leaving a free float that amplifies every move. The most recent institutional data from March shows a handful of insiders added small positions, though the magnitudes are nominal given the float size. There are no institutional asset managers of note beyond a negligible FMR LLC holding.

Earnings history adds caution for long holders. The four most recent prints have all produced negative one-day reactions — ranging from -0.9% to -12.5% — suggesting the market has consistently received results poorly. The next event is not due until late June, so that catalyst is some way off.

The next session worth watching is any further move in cost to borrow: a sustained fall below 50% would signal the borrow market has fully normalised, while any re-acceleration would indicate residual short demand in a name where the float is thin enough to move quickly.