RC365 Holding (LSE: RCGH) shares are getting a lot of attention right now. Last week, for example, they were the most bought shares on Hargreaves Lansdown‘s investment platform.
Should I follow the crowd and buy some RC365 stock for my own portfolio? Let’s discuss.
What does it do?
RC365 Holding is a holding company, which through its subsidiary, Regal Crown Technology Limited, offers FinTech solutions in China and Hong Kong.
The company offers a range of services including:
- Payment gateway solutions – it has developed its own Mobile Point Of Sale (mPOS) technology that allows merchants to make sales from their smartphones or tablets. It has also developed an online payment gateway that allows merchants’ customers to pay online.
- IT support – the company provides IT technical support services as well as cybersecurity consultation services.
- CatchAR – this is a proprietary offering that helps catering and entertainment businesses promote their services and branding through an innovative augmented reality (AR) and virtual reality (VR) system.
- Maid-Maid Matching – this is a peer-to-peer (P2P) platform that allows maids to find employers online.
So, overall, it’s quite a diversified business.
RC365 is led by CEO Chi Kit Law who has 20 years’ of payment solutions and banking leadership experience. Previously, he was Head of Banking Systems at MoneySwap Plc and Assistant Vice-President of Group Technology and Operations at DBS Bank.
The company – which only has a market-cap of around £130m – listed on the London Stock Exchange in March 2022. However, it didn’t really get much attention until June this year.
Why has the share price spiked?
Since mid-June, RC365’s share price has been on fire. On 15 June, the stock closed at 23.2p. However since then, it has traded as high as 180p (as I write this, it’s at 117p).
That’s a huge gain in a short amount of time.
What’s behind this big rise in the share price? Well, some of it will be down to deals the company has announced.
Recently, the group signed a deal with APEC Business Services to develop a banking app. It also secured a deal with Key Solution Venture that will allow it to print its brand on Mastercard credit cards that will be issued in Hong Kong.
However, I suspect that most of the share price rise is down to an article/advert entitled ‘Missed Nvidia? This London AI stock could jump over 1,000%’, which has been posted on a number of financial websites (by different authors, strangely).
This article seems to have generated an incredible amount of interest in the stock.
Worth buying?
Will I buy RC365 shares for my own portfolio? The answer to this is no. Ultimately, the stock is way too speculative for my liking.
For starters, the company isn’t profitable. Secondly, the shares are up around 400% in a month on the back of AI hype. After that kind of rise, I think there’s a decent chance of a big pullback. Third, the company has a price-to-sales ratio of about 100. That’s very high.
Of course, RC365 stock could keep rising from here. The company is doing some interesting deals. And right now, AI stocks have a lot of momentum.
However, I think there are much better (and safer) growth stocks to buy today.
