How Can We Objectively Estimate The Investment Value Of Hong Kong Stock? How Can We Make The Stock Market Cry Four Times?

Although Hong Kong stocks have no price limits, and there are still T+0 revolving trades, in most cases, the performance of individual stocks on every trading day will be very symmetrical, balanced and stable: for example, if there are more than 10 stocks that increase by more than 10%, there will be more than 10 stocks that fall by more than 10%. Generally speaking, there are not many stocks that are up more than 20% on a daily basis, and stocks with a daily rise of over 50% are even more rare.

The two stocks fell 90% during the day. They did not stop trading and did not rush to rebound. Before the closing of the afternoon market in June 27, 2017, many Hong Kong stocks suddenly broke down and the stock price was cut.

At the end of the day, a total of 12 boards and 4 GEM companies fell by more than 50%.

The sharp fall in Hong Kong stocks is mostly penny stocks with a stock price of less than HK $1.

Hanhua professional service closed at HK $0.064 on the 27 day, down 93.40% from the closing price of the previous trading day (HK $0.97), and the market value of the circulation dropped from HK $4 billion 712 million to HK $311 million.

Nevertheless, Hanhua's professional services were not suspended, and the next day (28) continued normal trading, the next day it fell 34.37% to HK $0.042.

On the 29 and 30 days, there was no rush to rebound.

Similarly, China integrated holdings held a closing price of HK $0.016 for the 27 day, down 94.29% from the closing price of the previous trading day (HK $0.28), and its circulation market value plummeted from HK $21 billion to HK $1 billion 200 million.

The following day was not suspended, until 30 days to close at HK $0.013, and no one "grabbed".

Obviously, the large shareholders and investors holding these two immortal stocks lost their fortunes in one day, but the big shareholders and big organizations did not complain. The small retail investors did not curse or cry, nor did they protest. The Hong Kong stock market was even more calm.

Because this is the true meaning of "buyer's conceit" and the result of self-determination of investors' "voting with feet".

Such a "flash collapse" incident, if occurred in the mainland A share market, the consequences will be unthinkable......

After the "flash collapse" incident, Li Xiaojia, the president of the stock exchange, pointed out that there are some objective factors in the fluctuation of low price stocks, such as cross shareholding, centralized holding, mortgage and so on.

He pointed out that the current concentration of new listed companies is strictly enforced, and it is hoped that the "shell making" action will become more difficult and even impossible.

Li Xiaojia explained that regulatory authorities have tightened supervision in the middle of the listing sector in recent years, and the "investor relations" have also changed.

However, these two days' movements in the small cap stocks are not caused by a regulatory act.

For some people who blame the HKEx on the creation of the "Innovation Board" consultation recently, he believes that consultation is just the beginning, and there is no causal relationship between them.

Li Xiaojia stressed that there would be no interference in the existing market ecosystem, but would not be willing to let the market fluctuate.

In fact, this is the maturity, freedom and openness of the Hong Kong stock market and confidence. This is the T+0 turnover of the Hong Kong stock market under the restriction of no rise or fall. The stocks are free to rise and fall and the buyers are conceited. As long as there is no evidence of illegal crimes, the regulators have no right to interfere.

The origin of the stock market: the stock denomination and the split share trading mechanism are closed by the closing statistics in June 30, 2017. There are 1752 stocks trading on the main board of Hongkong. Among them, there are as many as 660 stocks with a stock price below HK $1. Meanwhile, there are 288 stock pactions in Hongkong gem, of which 227 are below HK $1.

That is to say, a total of 887 shares of Hongkong's main board and gem are priced below HK $1, which are called "penny stocks".

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The share prices below 1 Hong Kong dollars are mostly small cap stocks, of which 455 of the stock market is less than 500 million Hong Kong dollars.

Of course, there are individual exceptions. For example, the share price of China's integrated holdings is only HK $0.28 before the stock price crash, but its market value is as high as HK $21 billion. However, after its share price plummeted to HK $0.016, its market value was only HK $1 billion 200 million.

The comparison of the stock market value between the Hong Kong stock and the A stock market (as of June 30, 2017 closing Statistics) dropped 90% in the stock market day: no suspension, no shouting in the mainland A share market, investors generally interpreted the small cap stocks as "easy to manipulate the stock price", therefore, the mainland investors preferred to stir up the small ones, stir up the new ones and stir up the bad ones.

But after the opening of Shanghai Hong Kong Tong and Shenzhen Hong Kong, many mainland retail investors have entered the Hong Kong stock market. Whether they will bring the A share speculation into Hong Kong stocks is very worrying.

20 years ago, the mainland Chinese investors accounted for 0.6% of the Hong Kong stock pactions completed by foreign investors. In 2014, before the Shanghai and Hong Kong exchanges were opened, the proportion of mainland China Investor pactions has increased to 13%. In 2015, after the opening of Shanghai and Hong Kong, the proportion of mainland China investor pactions increased sharply to 22%.

In fact, the Hong Kong stock market ecosystem is totally different from the A shares: first, the Hong Kong stock paction is dominated by institutional investors, and the foreign institutional investors account for a relatively large proportion of pactions. However, the mainland A shares are dominated by retail investors and the proportion of institutional participation is relatively low. Secondly, Hong Kong stocks are cheap, which is never seen before in the A share market. Third, Hong Kong stocks carry out T+0 swing trading, and there is no price limit in the stock market, but A shares do not have a revolving paction, and there is a 10% price limit.

Therefore, we should not blindly favor the stock in the mainland, but can not copy the A share speculation to Hong Kong stocks and bet with international institutional investors.

Why are there so many Hongkong cents stocks, up to more than 880? Apart from the "penny stock culture" peculiar to Hong Kong stocks, it also has a significant relationship with the stock par value, stock splitting and stock reduction mechanism.

As we all know, stock prices all over the world have the lowest share price control. For example, the US stock market price should not be less than 1 US dollars, otherwise it will be delisted. The market price of Hong Kong stock should not be less than HK $0.01, otherwise, it is necessary to shrink shares or withdraw from the market. The market price of A shares in mainland China should not be less than 1 yuan, otherwise it will be delisted.

Therefore, compared with US stocks and A shares, Hong Kong stocks have a large share price below HK $1.

The face value of a stock is the denomination shown on a stock certificate.

The face value of a stock usually has little to do with the prevailing market price.

But the right to split or reduce shares is right.

Changes will have a direct impact.

Hongkong stock market has no uniform provisions on the face value of stocks, and allows listed companies to split shares or reduce shares independently.

In general, most Hong Kong stocks prefer to split shares, but when the stock price approaches HK $0.01, they will be forced to carry out a large scale stock reduction, which will ensure that the share price is no less than HK $0.01.

However, only large Blue-chip company are less able to split shares. Of course, they will not shrink shares.

In the stock market, it fell 90%: no suspension, no abuse, but in Hongkong stock market.

It does not mean junk shares, but high priced stocks are generally large blue chips or blue chip stocks.

Therefore, most investors in Hong Kong stock prefer big blue chips and large market capitalization stocks, which is very different from mainland A share investors.

How can we judge whether the penny stock has the investment value? We can not be confused by the high and low share price, and we should not pay too much attention to the par value of the stock, or even ignore its stock splitting or stock reduction. But there are three key judgements.

(1) P / E ratio.

It is also known as market profit margin, which is the ratio of share price to earnings per share of the stock.

P / E is usually calculated by the company's profit in the past 12 months, but it can also be calculated according to the profit forecast for the coming year.

Investors can compare the P / E ratio of the company with another company in the same industry, or the overall market, or the company's past P / E ratio.

(2) the net rate of the city.

It is also known as the market price net rate, which is the ratio of share price to the net asset per share of the stock.

(3) dividend yield.

It is also known as the ratio of dividend to market, which is the percentage of the company's annual dividend to the market price of the stock.

The dividend rate can be used to compare the relative attractiveness of different dividend payouts or other investment products, such as bonds or bank deposits.

In Hong Kong stocks, many blue chip stocks are "quarterly dividend", such as Hang Seng Bank, HSBC Holdings, Standard Chartered Bank and so on.

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