(Yicai Global) Dec. 4 -- Shares of Caihong Display Devices fell by the daily exchange-imposed limit after two major shareholders decided to cut their stakes in the Chinese liquid crystal display maker, following a near-doubling of its stock price.

Caihong Display [SHA: 600707] fell 10 percent today to close at CNY7.74 (USD1.19). The shares had gained by the daily limit for seven consecutive trading days, reaching a 52-week high of CNY8.60 yesterday.

Hefei Xinping Industrial Investment Fund, Caihong’s fourth-largest investor, will pare its stake by as much as 71.8 million shares, equivalent to 2 percent of total outstanding equity, the LCD panel maker said in a statement late yesterday. Fifth-largest shareholder, Shaanxi Ruyi Electronic Technology, will trim its holding by up to 35.9 million shares, or 1 percent of the total.

Caihong Display’s stock had been driven higher by a rebound in LCD panel prices, but the Shaanxi province-based manufacturer has also warned about abnormal share price movements.

The price of large-size panels has continued to rise since November, while small and medium-sized panels prices have also gained, Huajin Securities said in a recent research report, adding that supply and demand has improved.

Another factor in Caihong’s rally was the hyping of certain technology concepts by speculators. In response, the company issued four risk warnings on abnormal stock price fluctuations, clarifying that its main business is liquid crystal display panels and glass substrates, not newer tech like OLEDs, flexible screens or graphene.

Founded in 1992, Caihong Display was the first company in China to produce color picture tubes for television sets. As display technologies advanced, it shifted into being an LCD panel maker, but has seen limited improvement in its financial performance. The company has lost money over the past 10 years after government subsidies are deducted, according to its earnings reports.

The firm’s loss in the first three quarters of this year reached CNY1.7 billion (USD260.3 million), nearly double that of the same period last year, as LCD panel prices were soft in the first half. Nine-month revenue jumped 68 percent to CNY6.9 billion.

Editor: Tom Litting