Data show that 283 A-share company shares fell below net assets, setting a new high since 2008. Among them, real estate, public utilities and other industries have the highest number of net-breaking companies, and the banking industry has a high proportion of net-breaking companies.
Data show that 283 A-share company shares fell below net assets, setting a new high since 2008. Among them, real estate, public utilities and other industries have the highest number of net-breaking companies, and the banking industry has a high proportion of net-breaking companies.
As of September 12, Wind data showed that 283 A-share companies fell below their net assets, setting a new high since 2008. Among them, real estate, public utilities and other industries have the highest number of net-breaking companies, and the banking industry has a high proportion of net-breaking companies. Many net companies have actively saved themselves by means of share repurchase, major shareholder increase, employee stock ownership plan, and equity incentives. Fu Lichun, director of research at Northeast Securities, told the China Securities Journal that in the short term, market sentiment is still fragile, and it is still necessary to be cautious in copying net stocks.
Broken net
The market continued to adjust, and the number of broken net shares continued to increase. Wind data shows that since 2018, 29 listed companies have fallen more than 50%. Jinlong Electromechanical, *ST Kaidi, *ST Tianma, *ST Fukong and other companies fell more than 70%.
Judging from the current situation, the number of broken net shares has reached a new high since 2008. The Pacific Securities Strategy Team pointed out that companies currently falling below the P/B ratio accounted for nearly 8%, up from 7.13% in June 2013. The average P/B ratio of A-shares is about 1.59 times. After the financial, petroleum and petrochemical industry companies, the average PB is about 2.05 times. The PSE of the Shanghai Composite Index has been lower than the valuation of nearly three historical outs.
Fu Lichun, director of research at Northeast Securities, told the China Securities Journal that the stock price continued to decline and the number of companies that broke the net was record high. Since 2008, the increase in the total number of listed companies has also been a factor. In addition, the delisting system still needs to be improved, and many poor performance companies are still trading.
As of September 12, among the above-mentioned companies, Wind data showed that 169 companies with a P/B ratio of less than 0.9 accounted for 59.7%. Among them, *ST Tianma City's net rate is lower than 0.5, Huaying Technology, COSCO Haineng and other six companies have a P/B ratio of 0.5-0.6. 24 companies such as Fuxing and Jianghuai have a P/B ratio of 0.6-0.7. 48 companies such as Bank of China and Tianfu Energy have a P/B ratio of 0.7-0.8. 90 companies such as Jilin Jidong and Dongfang Electric have a P/B ratio of 0.8-0.9. The remaining 114 listed companies have a P/B ratio of 0.9-1.
In terms of performance, 33 net-breaking stocks were attributable to the net profit of shareholders of listed companies in the first half of 2018, and the remaining 250 companies achieved profitability. Among them, 153 companies' net profit increased year-on-year, accounting for 53%. 110 companies increased by more than 10%, and 26 companies increased by more than 100%. Another 47 net-breaking stocks released the third-quarter results forecast, 30 pre-history, accounting for 71.43%. Among them, 5 were renewed, 7 were pre-increased, 16 were slightly increased, and 2 were turned losses.
It is worth noting that many of the companies that have broken the net are bright, and the net profit in the third quarter is expected to double. Taking Nanshan Holdings as an example, the company expects to realize net profit attributable to shareholders of listed companies from 204 million yuan to 260 million yuan in January-September 2018, an increase of 80.83%-130.8%. Regarding the main reason for the growth in performance, the company said that the real estate business carried over the area increased, and the profit increased year-on-year. As of September 12, Nanshan Holdings' P/B ratio was less than 0.8.
Industry differentiation
In the industry, the Pacific Securities Research Report shows that the current real estate industry has a market-to-book ratio of about 1.3 times, public utilities at 1.53 times, the commercial trade industry at 1.54 times, the electrical equipment industry at 1.74 times, and the media industry at 2.01 times. Most industries are at historically low levels.
Specifically, 34 real estate companies broke the net, and the number of broken companies was the highest. There are more than 20 companies in the utilities and transportation industries. There are more than 15 industries in the automotive, banking, machinery, media, and mining industries. Since 2018, except for the banking sector, which fell by 12.73%, the rest of the sector has fallen by more than 20%. The real estate and utilities sectors fell more than 26%. The media and auto industries fell more than 30%.
Banking companies accounted for a high percentage of net profit. Except for China Merchants Bank, Ningbo Bank and some sub-new shares, basically all of the company was broken. Among them, the P/B ratio of Hua Xia Bank and Bank of Communications is less than 0.7.
Fu Lichun told the China Securities Journal that the real estate industry itself has strong financial attributes. Since the beginning of this year, the supervision has become stricter, the regulation has been overweight, and the industry has been de-lost, which has made the phenomenon of breaking the net out.
Wanlian Securities pointed out that the net tide is often accompanied by the arrival of the bottom of the market, and the first two breaks and the market low have a high degree of resonance. Although history may not be simply repeated, the value of the configuration of broken net stocks has gradually become prominent. Among them, real estate and financial companies have good fundamentals, and some high-quality companies still have room for improvement in medium and long-term performance.
Active self-help
In this context, many companies intend to actively save themselves by means of share repurchase, major shareholder increase, employee stock ownership plan, and equity incentives.
In terms of share repurchase, according to the incomplete statistics of China Securities Journal, 42 net-breaking companies have issued share repurchase plans this year, and most companies have repurchased more. Taking Good Home, for example, the company issued a share repurchase plan on July 10, and it is planned to repurchase no more than 240 million shares at a price of no more than 3 yuan per share. If the repurchase is full, it is expected that more than 80 million shares will be repurchased, accounting for 3.13% of the company's total share capital. For reasons of repurchasing shares, the company stated that based on its confidence in future development prospects and its high recognition of the company's value, it will establish and improve the investor return mechanism, enhance the investment value of listed companies, and enhance investor confidence.
Many companies are planning to buy back shares at a high premium. Taking Dongfang Risheng as an example, the company announced on the evening of August 12 that it intends to repurchase the stock with a repurchase price of no more than RMB 16 yuan/share for no less than RMB 100 million and no more than RMB 500 million. Plan, employee equity incentive plan or reduce registered capital to boost investor confidence and mobilize the enthusiasm of company executives and key employees. As of September 12, the company's stock price reported 6.26 yuan / share, the stock repurchase premium rate exceeded 156%.
However, Fu Lichun believes that it is still necessary to carefully analyze the net stocks. With the index of P/B ratio alone, it is still difficult to judge the future direction. The macroeconomic situation of the industry and the related company's horizontal comparison should be considered. In the short term, market sentiment remains fragile and there are still many uncertainties.
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