Alibaba Health Information Technology (241 HK) is a subsidiary of Alibaba Group (9988 HK / BABA).

The parent company holds approximately 60% of the shares, leaving only 40% available for public trading.

Short interest as a percentage of float has recently doubled—from 20% to 40%—making it the most shorted stock in the Hang Seng Index.

This surge in short interest previously coincided with a rally.

Both the crowded score and squeeze score currently stand at 100%. The squeeze score accounts for crowding levels as well as recent price momentum.

Reasons for bearishness include:

Shares declined 13% following China’s announcement of increased regulatory scrutiny on online pharmacies.

Analysts have lowered price targets due to muted growth expectations.

The company faces rising competitive pressure from JD Health, which outperforms in next-day delivery services.

Despite growth in both earnings and revenue, the stock has fallen 78% over the past five years.

Analyst sentiment is weakening: buy ratings have dropped from 81% to 60%, while sell ratings have risen from 0% to 12%. The overall consensus remains positive, but with declining conviction.

Coinciding with the first doubling in short interest, the borrow cost for the shares spiked. At present this is the only hard-to-borrow constituent of the Hang Seng. The current borrow cost is 7.5% annualized fee.

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