On Friday, the A-share market was not boosted by the peripheral markets, with the three major indices rising and falling, showing a downturn. By the end of the day, the Shanghai Stock Exchange Index was 2774.75 points, down 0.71%; Shenzhen Stock Exchange Index was 8795.18 points, down 1.39%; GEM was 1507.71 points, down 1%. Although the index declined slightly, the characteristics of the weak market are very obvious. There are 2907 stocks in the two cities, and the industry sector is green.
More importantly, the phenomenon of queuing collapse of high-ranking white horse stocks appears. In the morning, ZTE crashed, once blocking the stop, but then opened it. Angel yeast opened low and walked low. Shares of Angel yeast hovered around the drop limit for most of the day. For nearly 15 years, the pharmaceutical stocks of Pian Zaihuang were also close to the drop limit. The concept of pork dived in the tail dish, and Zhengbang Science and Technology fell to a halt.
At present, there are fewer and fewer high-ranking stocks, most of which are white horse stocks, such as Maotai, Er Ophthalmology, Wuliangye, Shanghai Electric Power Co., Ltd., Shenyi Technology, Jimin Pharmaceutical Co., Ltd. Are these stocks likely to collapse? Does the collapse of strong stocks mean that the market is moving to the bottom?
Analysts believe that strong stocks make up for the decline mostly because of two reasons: first, the performance is not up to expectations, and the divergence of funds triggers trampling; second, the main capital chain is broken, the situation of bursting positions, triggering selling. Judging from the current situation, these stocks may exist in the above situation. According to the past economy, when strong stocks line up to collapse, it is often a signal that the market bottoms. However, this time, we may need to further observe the reaction of the peripheral market and the progress of trade disputes. If expected to be stable, the follow-up market will gradually stabilize.
Why did ZTE collapse again?
It can be said that todays market sentiment is spread out by ZTE. This morning, ZTE opened high and went low. At 11 a.m., the stock was suddenly pushed to the drop stop. Subsequently, although the drop limit was opened, ZTE still experienced a 7.74% drop throughout the day.
So why did the stock suddenly fall? On the news, the U.S. General Administration on Wednesday issued a provisional regulation banning the use of federal government funds to purchase telecommunications equipment from five Chinese companies, Huawei, ZTE, Haikangwei, Dahua and Haineng, under the Defense Authorization Act of 2019, which will come into effect on March 13. In fact, the news has been released for two days. It should be fermented a few days ago. Why wait until today?
In fact, there is another news on the market, that is, China Mobile Financial Conference. On August 8, Yang Jie, chairman of China Mobile, said that China Mobiles annual capital expenditure this year did not exceed 166 billion yuan, which was down from 167.1 billion yuan last year, with investment in 5G expected to be 24 billion yuan. He pointed out that for 5G to be realistic and actively promote, the current 5G technology, industry maturity still needs time, to grasp the rhythm. Even considering 5G, total capital expenditure will not increase substantially. From 2020 to 2022, it will be the peak period of 5G investment, but China Mobile will control the total investment. The market anticipates that future operators may hold down the price of 5G equipment.
After ZTE fell sharply, the company responded that at present, all production and business activities are normal and the fundamentals remain unchanged.
Pian Zaihuang accidentally killed and fell
The film, which has risen for 15 years, also collapsed today, with some surprises. The stock was close to a stop at most and closed down 7.09%.
On August 8, Pian Tsai-huang announced that he had won 51% of the shares of Huarun Pian Tsai-huang Pharmaceutical Co., Ltd. held by Huarun Pharmaceutical Group Co., Ltd. The transaction will help the company devote itself to the development of its main business and the improvement of its core competitiveness, improve the planning and layout of its general drug business, and have no significant impact on the financial situation and operating results of the company and the target company in the short term, said Mr. Pian.
Pianzaihuang brand occupies the first brand of hepatobiliary drugs for a long time. The strong brand value makes the use of Pianzaihuang brand of drugs, health care products and cosmetics have natural advantages in market promotion. Aiming at the problem of natural musk supply of scarce raw materials, the company took the lead in building its own musk breeding base in China, and has become the leading musk breeding industry. The number of musk deer in the self-built and co-built bases accounts for about half of the countrys total. In the first quarter of this year, the companys performance growth was also good.
In addition to Pian Zaihuang, there are Angel yeast, Zhengbang technology and good wives who crashed inexplicably before today.
Angel yeast disclosed its semi-annual report today that its net profit in the first half of the year was 464 million yuan, down 7.66% from the same period last year; in the first quarter of this year, its operating income was 1.822 billion yuan, up 11.61% from the same period last year; the net profit of shareholders belonging to listed companies was 237 million yuan, down 14.56% from the same period last year, in 2015, 2016 and 2017. Angel yeasts performance has even maintained a high growth rate. Its net profit has increased by 90.29%, 91.04% and 58.33% over the past three years, respectively. Even in 2018, Angel yeasts performance has achieved positive growth.
After-market data show that there are institutions and large investors to sell the stock ahead of time.
So far, most of the stocks listed on the market have experienced flash crashes, such as Dazu Laser, Donga Jiao, Fuling pickle, good wife, Yili shares, ZTE, Angel yeast, Zhengbang Science and Technology, Pianzaihuang and so on. In fact, in this year, the emergence of such a market is not a strange thing. No, even Buffett will step on Ray.
Buffett also trampled on thunder
According to earnings data, Kraft Heinzs net profit fell to $854 million in the first half of the year, to $1.76 billion in the same period last year, a decline of 51.4%, and its earnings per share fell to 0.7 cents. Excluding items such as one-time profit and loss, Kraft Hens adjusted earnings per share for the first half of the year to $1.44, down about 24% from $1.89 a year earlier. The adjusted EPS for the second quarter was $0.37. In the first half of the year, Kraft Heinzs net sales fell by about 5% from a year earlier to $12.37 billion. The adjusted EBITDA was $1.6 billion in the second quarter and $3.03 billion in the first half.
According to the data, Berkshire Hathaway owns more than 325 million shares of Kraft Hens, accounting for 26.7% of the companys shares. Since the beginning of this year, Berkshire Hathaways position has dropped from just over $14 billion to about $8.7 billion, with a loss of about 37% and a floating loss of more than $5 billion.
In 2013, Berkshire Hathaway and 3G Capital bought Heinz for $23 billion and merged with Kraft two years later. In June, Buffett said in an interview, I made a mistake in the Kraft acquisition, that is, overbid.
Is a strong stock crash a bottoming signal?
First of all, the flash rhythm of strong stocks has just begun. Whether there are any new crashes in the follow-up still needs further verification. According to the current situation, most of the stocks still in high positions are white horse stocks, such as Maotai, Er Ophthalmology, Wuliangye, Shanghai Electric Power Co., Ltd., Biotechnology, Jimin Pharmaceutical Co., Ltd. But this does not mean that these stocks will not fall, such as Jimin Pharmaceutical, which is hard-pulled out. The stock has been in the upstream channel since last June, up nearly five times.
However, there is no bright spot in the performance of the stock, and its corresponding market value has reached 15.23 billion yuan.
From the perspective of shareholder composition, the stocks long-term success is not the result of the orthodox value school institutions. The top ten circulating shareholders of the stock in the first quarter did not have a public offering fund, most of them were individual investors.
There are no scattered shareholdings.
So its quite frightening for stocks like this to flash. Only when such stocks collapse, the market may have a real bottom. Of course, this is only a necessary condition, the market bottom still needs some sufficient conditions:
Firstly, in order to be stable, the uncertainties in the market need to be gradually reduced. Only in this way can large investors dare to buy stocks heavily. From the current situation, there are too many disturbances in the peripheral market, the economic prospects are not clear, and Buffett can step on Ray is also a proof.
Second, valuation should be cheap enough. There are some kinds of structural undervaluation in the A-share market, but overall, there is still a long way to go from the bottom of historical valuation. In addition, the valuation level of small and medium-sized stocks is still high, but their performance growth rate does not meet the requirements of valuation.
From the current market situation, some positive factors may also be brewing. The collapse of strong stocks means the gradual extremization of market pessimism, which is usually one of the important signals of the market bottoming, and the global wave of interest rate cuts will also increase asset prices and valuations. And just this week, the securities companies cut their refinancing rates, and today they are expanding the target to 1600, which shows the managements care for the market. With the passage of time, the market should gradually develop in a positive direction.
Source: China Responsible Editor of Securities Dealers: Yang Bin_NF4368