[Today’s Guide]
> Outline of national security strategy approved, information security and military industry embrace new opportunities
> Shanghai develops technological innovation center, Ministry of Human Resources and Social Security proposes electronic social security
> Fushun Special Steel increases investment in military industry, Highly Group purchases private enterprise to promote mixed ownership reform
> Actual controller of Guanghe Landscape Culture Communication changes, Truking Technology, etc., plans high share conversion and dividend
[XFA Focus]
○ Outline of national security strategy approved, information security and military industry embrace new opportunities
------
The Political Bureau of the Central Committee of the Communist Party convened a meeting on Jan. 23 to deliberate and approve the outline of national security strategy. It was emphasized on the meeting that national security is an important base for the peace and stability of the country. National security work of different areas must be done well, and the building of various guarantee abilities related to national security must be promoted.
Comment: Details of the outline of national security strategy is not announced yet. Research institutions all believe that the outline will benefit the military security, information security, etc. industries in the long term. The military industry reform will see an overall acceleration in 2015, and areas like the reorganization of relevant research institutions, consolidation of aero-engine assets, military-civil enterprises integration, etc. will achieve further breakthrough. Future equipment demand mainly lies in sea and air equipment platform and informatization direction, and special attentions can be paid to the suppliers and matched suppliers of these equipment. China has attached great importance to information security issues. Multiple policies like network security review system, network security law, etc. will be launched in the future. Software enterprises related to information security, autonomous operation system, etc., and hardware enterprises related to server, etc., will benefit the most.
[XFA Selection]
○ The transparency construction in the approval of IPO and re-financing makes progress. Review comments and feedbacks will be made public to the society.
○ The outline of Beijing-Tianjin-Hebei development has been submitted for deliberation. Beijing will release a detailed list next year.
○ The balance of insurance capitals reached 9.3 trillion yuan by the end of 2014. Pilot car insurance reform is going to be launched soon.
○ China Chengtong Holdings Group Ltd., and China Resources (Holdings) Company Limited, etc., representatives of central enterprises, attended the China State-owned Assets & Enterprises Industry Innovation Strategic Alliance Establishment Conference on Jan.24.
○ China CNR Corporation Limited (601299.SH; 06199.HK) recently signed several significant contracts with a total contract amount reaching 24.3 billion yuan, accounting for 25 percent of the company’s revenue in 2013.
○ Beijing Tongzhou Universal Studios project begins construction this October, and the annual tourist amount is expected to reach 10 million.
[Industry Information]
○ Shanghai develops technological innovation center, Industry Cloud becomes important direction
------
The government work report of Shanghai was announced on Jan. 25, proposing to construct a technological innovation center with global influence, and to make it the fifth center after the previous four centers which are international economy, financing, commerce and shipping center. The report cancelled the specific goal towards GDP growth and leaned largely to technological innovation.
Comment: Hi-tech parks will play an important role in the creation of technological innovation center. Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH) is formulating an action plan to construct a global technological innovation center, and the plan is expected to be finished recently. Furthermore, Wenhui Daily published the first article, reporting the active transformation towards “Industry Cloud” of Shanghai supercomputer center, of “2015, march towards global technological innovation center” series on Jan. 25. Industry Cloud is a new tool applied by IT to support traditional industries upgrading. Among local Shanghai companies, the Bao Cloud of Shanghai Baosight Software Co., Ltd. (600845.SH) is covered in the pilot implementation scheme of Industry Cloud innovative service. Shanghai East-China Computer Co., Ltd. (600850.SH) is a leading enterprise in cloud computing.
○ Ministry of Human Resources and Social Security deepens pension insurance system reform and develops electronic social security
------
The Ministry of Human Resources and Social Security convened a news press on Jan. 23 that it will study on formulating the reform implementation scheme centering on the national planning of employee basic pension, etc. this year. It will also strive to develop electronic social security, and the number of cardholders will surpass 800 million by the end of this year.
Comment: The accelerated reform and informatization of pension insurance system will bring more market opportunities to the social security card and medical informatization industries, and derive businesses like background data center, network platform construction and operation, etc. YLZ Information Technology Co., Ltd. (300096.SZ), a leading social security card production enterprise in Fujian Province, also expands its business outside the province and develops Health Cloud platform service; Resident Health Card, produced by Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), has been distributed in several provinces, and chips of social security card also have been supplied in batches.
○ Live-bird trading might become key point in controlling bird flu, cold chain logistics to benefit again
------
A new case of human infection of H7N9 was confirmed in Shanghai on Jan. 22 and the patient is in a critical condition. Overall consideration of various information shows that the suspension of live-bird trading has become the main means to control the epidemic.
Comment: Cold chain logistics industry is an emerging one in China. Multi policies and planning have been launched to support it. The suspension of live-bird trading can directly lift the demand of cold chain logistics. Fujian Snowman Co., Ltd. (002639.SZ) plans to acquire shares of Greenhalgh Refrigeration Equipment Limited Company, a domestic refrigeration enterprise, to provide support to its cold chain logistics business; Yantai Moon Co., Ltd. (000811.SZ) has purchased Dunham-Bush Limited which is an international refrigeration giant. And institutions are optimistic about its cooperation effect; the private placement application of Shanghai Hanbell Precise Machinery Co., Ltd. (002158.SZ) is under the approval of the China Securities Regulatory Commission (CSRC). Several investment institutions have visited the company recently.
[Announcement Interpretation]
○ Fushun Special Steel raises RMB2.4 bln to invest in military industry
------
Fushun Special Steel Co., Ltd. (600399.SH) plans to issue 110 million shares at 21.71 yuan per share to raise 2.4 billion yuan, and 800 million yuan of which will be used to invest in “Tezhi Phase II” project, 1.4 billion yuan will be used to pay off debts, and the rest will be used for supplementing working capital. Fushun Hexin Investment Management Partnership and Sunflower No.1 Aggregate Asset Management Plan, purchasers of the private placement, are both founded by the company’s senior management and employees.
Comment: The employee shareholding plan launched by Fushun Special Steel accords with the requirements of “mixed ownership reform”. The “Tezhi Phase II” project, established through fundraising, will construct facilities like vacuum induction furnace, etc., produce 39, 300 tons of high quality special steel ingoting or high temperature alloy, nickel base alloy and titanium alloy ingot. Its terminal products will be applied in military areas like the manufacturing of strategic and tactic guided missile, launcher, aero-engine, undercarriage, nuclear power steam generator, naval craft power, etc.
○ Highly Group purchases private enterprise, another company of Shanghai Electric Group takes reform
------
Shanghai Highly (Group) Co., Ltd. (600619.SH) plans to issue 153 million shares at 7.5 yuan per share to acquire 100 percent equities of Hangzhou Fusheng Electrical Appliance Co., Ltd. The transaction is priced at 1.15 billion yuan. And a supporting fund of 383 million yuan is going to be raised. The net profit of Fusheng Electrical Appliance, a private refrigerator, air condition compressor and motor manufacturer, from Jan. to Oct., 2014 is 39.23 million yuan. After the transaction, the listed company will become the most competitive refrigeration compressor and motor supplier globally.
Comment: Recently, China Cinda Asset Management Co., Ltd. jointly invested 20 billion yuan in establishing SOEs mixed ownership reform funds with Shanghai State-owned Assets Operation Co., Ltd. Han Zheng, secretary of the municipal party Committee of Shanghai, commented firm decision in promoting the new round of Shanghai state-owned assets & enterprises reform. This transaction will be a new case for the mixed ownership reform of Shanghai state-owned assets, and also another state-owned enterprise reform case of Shanghai Electric Group Co., Ltd., the controlling shareholder of Shanghai Automation Instrumentation Co., Ltd. (600848.SH) after the reform of Automation Instrumentation. Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH), under Shanghai Electric Group Co., Ltd., soared by the daily 10 percent limit, and Shanghai Electric Group Company Limited (601727.SH) surged by 5 percent at last trading day.
○ Actual controller of Guanghe Landscape Culture Communication changes with RMB4 bln invested in online game.
------
ShanXi Guanghe Landscape Culture Communication Co., Ltd. (600234.SH) plans to issue 343 million shares at 11.74 yuan per share to raise 4.03 billion yuan from Jiangsu Wuyou Investment Development Limited Company, etc. The raised 3 billion will be used to purchase 100 percent equities of Guangzhou Chuangsi Information Technology Limited Company. After the transaction, Zhu Mingliang, actual controller of Wuyou Investment, will become the new actual controller of the listed company.
Guangzhou Chuangsi is an online game company. Its operation platform “9377” and core game products, “Lie Yan”, etc. have large market influence. From Jan. to Sept., 2014, Guangzhou Chuangsi recorded its operation revenue at 604 million yuan and net profit at 118 million yuan.
○ Shindoo Chemi-industry purchases Pixian Bean Paste
------
Chengdu Yiyantang Condiment Company, a subsidiary of Shindoo Chemi-industry Co., Ltd. (002539.SZ), plans to purchase 80 percent equities of Sichuan Wanghong Food Limited Company, which is engaged in the development of bean paste, condiment, etc. and owns licensed trademark of “Pixian Bean Paste”. After the transaction, “Pixian Bean Paste” and “Sichuan Pickled Vegetables” will become new profit growth points.
Comment: Shindoo Chemi-industry built its condiment development strategy by purchasing Xinfan Food Limited Company and increasing investment in salt companies in last Dec. “Pixian Bean Paste” is usually called the soul of Sichuan cuisine and its production technology is covered in the second batch of national intangible cultural heritage.
○ Gloria Phar. to raise RMB6 bln to purchase Powerdone Phar.
------
Harbin Gloria Pharmaceuticals Co., Ltd. (002437.SZ) plans to issue shares at 21.93 yuan per share to raise 6 billion yuan from ten institutions, and eight of which are partnerships established by the actual controller, deputy director and core management of the company for this private placement. 23.89 billion yuan of above raised capitals will be used to purchase 85 percent equities of Shanxi Powerdone Pharmaceutics Co., Ltd. This purchase is of great significance to Gloria Pharmaceuticals in expanding its business in heart and cerebral vessels market.
[Financial Reports Express]
○ Truking Technology, etc., plans high share conversion and dividend
------
The first annual report of companies on the ChiNext Board is issued. Truking Technology Limited (300358.SZ) sees a year-on-year growth of 14 percent in 2014. Its dividend distribution is decided as a 10-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for 10 shares. Nanfang Ventilator Co., Ltd. (300004.SZ) expects its net profit in 2014 to grow by 145 percent year on year and proposes a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for 10 shares. Beijing Thunisoft Co., Ltd. (300271.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its annual report. Beijing TRS Information Technology Co., Ltd. (300229.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for 10 shares.
○ Western Securities and Huatai Securities expect multiplied performance growth
------
Western Securities Co., Ltd. (002673.SZ) expects its net profit in 2014 to grow by 130 to 160 percent year on year, while Huatai Securities Co., Ltd. (601688.SH) expects its net profit in 2014 to see a year-on-year growth of 80 to 100 percent. Both of the companies benefit from the surge of the stock market and the large income growth of securities brokerage business, credit transaction business, investment bank business and self-operated business.
[Weekly Review]
○ Expected and unexpected situations
------
A big slump totally overthrows our previous views towards bull market and bear market, and a great surge also does the same thing. Last week saw frequent occurrence of large drop and big surge, and some investors hesitated in being bearish or bullish and missed favor from both sides. At the beginning of last week when the indexes fluctuated sharply, XFA emphasized frequently in XFA Focus, Weekly Review, etc. that short-term fluctuation does not change the trend of a bull market. The adjustment demand might be released soon. In fact, the indexes resumed and created new record just in that week.
Frankly speaking, it is no surprise that the indexes would create new records, but it is unexpected that the new record is set in such a short term. It is within expectation that some stocks go bullish after several months’ adjustment. What’s unexpected is that weighted stocks that experienced huge surge recently also resume rapidly. It should be mentioned that the management are still worried about the rapid surge of indexes, but the stock market itself is an outbreak of collective emotions, so it will either surge or drop too much. It is too hard to stop where it should stop.
What we should ponder about the market in last week is that the punishment on securities companies for their violations on margin trading and short selling is beyond many people’s expectation, but why some people do not change their mind when securities stocks all dropped by the daily 10 percent limit and even dare to go bottom fishing? To be familiar with internal value might be more useful than to catch price fluctuation.
> Outline of national security strategy approved, information security and military industry embrace new opportunities
> Shanghai develops technological innovation center, Ministry of Human Resources and Social Security proposes electronic social security
> Fushun Special Steel increases investment in military industry, Highly Group purchases private enterprise to promote mixed ownership reform
> Actual controller of Guanghe Landscape Culture Communication changes, Truking Technology, etc., plans high share conversion and dividend
[XFA Focus]
○ Outline of national security strategy approved, information security and military industry embrace new opportunities
------
The Political Bureau of the Central Committee of the Communist Party convened a meeting on Jan. 23 to deliberate and approve the outline of national security strategy. It was emphasized on the meeting that national security is an important base for the peace and stability of the country. National security work of different areas must be done well, and the building of various guarantee abilities related to national security must be promoted.
Comment: Details of the outline of national security strategy is not announced yet. Research institutions all believe that the outline will benefit the military security, information security, etc. industries in the long term. The military industry reform will see an overall acceleration in 2015, and areas like the reorganization of relevant research institutions, consolidation of aero-engine assets, military-civil enterprises integration, etc. will achieve further breakthrough. Future equipment demand mainly lies in sea and air equipment platform and informatization direction, and special attentions can be paid to the suppliers and matched suppliers of these equipment. China has attached great importance to information security issues. Multiple policies like network security review system, network security law, etc. will be launched in the future. Software enterprises related to information security, autonomous operation system, etc., and hardware enterprises related to server, etc., will benefit the most.
[XFA Selection]
○ The transparency construction in the approval of IPO and re-financing makes progress. Review comments and feedbacks will be made public to the society.
○ The outline of Beijing-Tianjin-Hebei development has been submitted for deliberation. Beijing will release a detailed list next year.
○ The balance of insurance capitals reached 9.3 trillion yuan by the end of 2014. Pilot car insurance reform is going to be launched soon.
○ China Chengtong Holdings Group Ltd., and China Resources (Holdings) Company Limited, etc., representatives of central enterprises, attended the China State-owned Assets & Enterprises Industry Innovation Strategic Alliance Establishment Conference on Jan.24.
○ China CNR Corporation Limited (601299.SH; 06199.HK) recently signed several significant contracts with a total contract amount reaching 24.3 billion yuan, accounting for 25 percent of the company’s revenue in 2013.
○ Beijing Tongzhou Universal Studios project begins construction this October, and the annual tourist amount is expected to reach 10 million.
[Industry Information]
○ Shanghai develops technological innovation center, Industry Cloud becomes important direction
------
The government work report of Shanghai was announced on Jan. 25, proposing to construct a technological innovation center with global influence, and to make it the fifth center after the previous four centers which are international economy, financing, commerce and shipping center. The report cancelled the specific goal towards GDP growth and leaned largely to technological innovation.
Comment: Hi-tech parks will play an important role in the creation of technological innovation center. Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH) is formulating an action plan to construct a global technological innovation center, and the plan is expected to be finished recently. Furthermore, Wenhui Daily published the first article, reporting the active transformation towards “Industry Cloud” of Shanghai supercomputer center, of “2015, march towards global technological innovation center” series on Jan. 25. Industry Cloud is a new tool applied by IT to support traditional industries upgrading. Among local Shanghai companies, the Bao Cloud of Shanghai Baosight Software Co., Ltd. (600845.SH) is covered in the pilot implementation scheme of Industry Cloud innovative service. Shanghai East-China Computer Co., Ltd. (600850.SH) is a leading enterprise in cloud computing.
○ Ministry of Human Resources and Social Security deepens pension insurance system reform and develops electronic social security
------
The Ministry of Human Resources and Social Security convened a news press on Jan. 23 that it will study on formulating the reform implementation scheme centering on the national planning of employee basic pension, etc. this year. It will also strive to develop electronic social security, and the number of cardholders will surpass 800 million by the end of this year.
Comment: The accelerated reform and informatization of pension insurance system will bring more market opportunities to the social security card and medical informatization industries, and derive businesses like background data center, network platform construction and operation, etc. YLZ Information Technology Co., Ltd. (300096.SZ), a leading social security card production enterprise in Fujian Province, also expands its business outside the province and develops Health Cloud platform service; Resident Health Card, produced by Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), has been distributed in several provinces, and chips of social security card also have been supplied in batches.
○ Live-bird trading might become key point in controlling bird flu, cold chain logistics to benefit again
------
A new case of human infection of H7N9 was confirmed in Shanghai on Jan. 22 and the patient is in a critical condition. Overall consideration of various information shows that the suspension of live-bird trading has become the main means to control the epidemic.
Comment: Cold chain logistics industry is an emerging one in China. Multi policies and planning have been launched to support it. The suspension of live-bird trading can directly lift the demand of cold chain logistics. Fujian Snowman Co., Ltd. (002639.SZ) plans to acquire shares of Greenhalgh Refrigeration Equipment Limited Company, a domestic refrigeration enterprise, to provide support to its cold chain logistics business; Yantai Moon Co., Ltd. (000811.SZ) has purchased Dunham-Bush Limited which is an international refrigeration giant. And institutions are optimistic about its cooperation effect; the private placement application of Shanghai Hanbell Precise Machinery Co., Ltd. (002158.SZ) is under the approval of the China Securities Regulatory Commission (CSRC). Several investment institutions have visited the company recently.
[Announcement Interpretation]
○ Fushun Special Steel raises RMB2.4 bln to invest in military industry
------
Fushun Special Steel Co., Ltd. (600399.SH) plans to issue 110 million shares at 21.71 yuan per share to raise 2.4 billion yuan, and 800 million yuan of which will be used to invest in “Tezhi Phase II” project, 1.4 billion yuan will be used to pay off debts, and the rest will be used for supplementing working capital. Fushun Hexin Investment Management Partnership and Sunflower No.1 Aggregate Asset Management Plan, purchasers of the private placement, are both founded by the company’s senior management and employees.
Comment: The employee shareholding plan launched by Fushun Special Steel accords with the requirements of “mixed ownership reform”. The “Tezhi Phase II” project, established through fundraising, will construct facilities like vacuum induction furnace, etc., produce 39, 300 tons of high quality special steel ingoting or high temperature alloy, nickel base alloy and titanium alloy ingot. Its terminal products will be applied in military areas like the manufacturing of strategic and tactic guided missile, launcher, aero-engine, undercarriage, nuclear power steam generator, naval craft power, etc.
○ Highly Group purchases private enterprise, another company of Shanghai Electric Group takes reform
------
Shanghai Highly (Group) Co., Ltd. (600619.SH) plans to issue 153 million shares at 7.5 yuan per share to acquire 100 percent equities of Hangzhou Fusheng Electrical Appliance Co., Ltd. The transaction is priced at 1.15 billion yuan. And a supporting fund of 383 million yuan is going to be raised. The net profit of Fusheng Electrical Appliance, a private refrigerator, air condition compressor and motor manufacturer, from Jan. to Oct., 2014 is 39.23 million yuan. After the transaction, the listed company will become the most competitive refrigeration compressor and motor supplier globally.
Comment: Recently, China Cinda Asset Management Co., Ltd. jointly invested 20 billion yuan in establishing SOEs mixed ownership reform funds with Shanghai State-owned Assets Operation Co., Ltd. Han Zheng, secretary of the municipal party Committee of Shanghai, commented firm decision in promoting the new round of Shanghai state-owned assets & enterprises reform. This transaction will be a new case for the mixed ownership reform of Shanghai state-owned assets, and also another state-owned enterprise reform case of Shanghai Electric Group Co., Ltd., the controlling shareholder of Shanghai Automation Instrumentation Co., Ltd. (600848.SH) after the reform of Automation Instrumentation. Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH), under Shanghai Electric Group Co., Ltd., soared by the daily 10 percent limit, and Shanghai Electric Group Company Limited (601727.SH) surged by 5 percent at last trading day.
○ Actual controller of Guanghe Landscape Culture Communication changes with RMB4 bln invested in online game.
------
ShanXi Guanghe Landscape Culture Communication Co., Ltd. (600234.SH) plans to issue 343 million shares at 11.74 yuan per share to raise 4.03 billion yuan from Jiangsu Wuyou Investment Development Limited Company, etc. The raised 3 billion will be used to purchase 100 percent equities of Guangzhou Chuangsi Information Technology Limited Company. After the transaction, Zhu Mingliang, actual controller of Wuyou Investment, will become the new actual controller of the listed company.
Guangzhou Chuangsi is an online game company. Its operation platform “9377” and core game products, “Lie Yan”, etc. have large market influence. From Jan. to Sept., 2014, Guangzhou Chuangsi recorded its operation revenue at 604 million yuan and net profit at 118 million yuan.
○ Shindoo Chemi-industry purchases Pixian Bean Paste
------
Chengdu Yiyantang Condiment Company, a subsidiary of Shindoo Chemi-industry Co., Ltd. (002539.SZ), plans to purchase 80 percent equities of Sichuan Wanghong Food Limited Company, which is engaged in the development of bean paste, condiment, etc. and owns licensed trademark of “Pixian Bean Paste”. After the transaction, “Pixian Bean Paste” and “Sichuan Pickled Vegetables” will become new profit growth points.
Comment: Shindoo Chemi-industry built its condiment development strategy by purchasing Xinfan Food Limited Company and increasing investment in salt companies in last Dec. “Pixian Bean Paste” is usually called the soul of Sichuan cuisine and its production technology is covered in the second batch of national intangible cultural heritage.
○ Gloria Phar. to raise RMB6 bln to purchase Powerdone Phar.
------
Harbin Gloria Pharmaceuticals Co., Ltd. (002437.SZ) plans to issue shares at 21.93 yuan per share to raise 6 billion yuan from ten institutions, and eight of which are partnerships established by the actual controller, deputy director and core management of the company for this private placement. 23.89 billion yuan of above raised capitals will be used to purchase 85 percent equities of Shanxi Powerdone Pharmaceutics Co., Ltd. This purchase is of great significance to Gloria Pharmaceuticals in expanding its business in heart and cerebral vessels market.
[Financial Reports Express]
○ Truking Technology, etc., plans high share conversion and dividend
------
The first annual report of companies on the ChiNext Board is issued. Truking Technology Limited (300358.SZ) sees a year-on-year growth of 14 percent in 2014. Its dividend distribution is decided as a 10-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for 10 shares. Nanfang Ventilator Co., Ltd. (300004.SZ) expects its net profit in 2014 to grow by 145 percent year on year and proposes a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for 10 shares. Beijing Thunisoft Co., Ltd. (300271.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its annual report. Beijing TRS Information Technology Co., Ltd. (300229.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for 10 shares.
○ Western Securities and Huatai Securities expect multiplied performance growth
------
Western Securities Co., Ltd. (002673.SZ) expects its net profit in 2014 to grow by 130 to 160 percent year on year, while Huatai Securities Co., Ltd. (601688.SH) expects its net profit in 2014 to see a year-on-year growth of 80 to 100 percent. Both of the companies benefit from the surge of the stock market and the large income growth of securities brokerage business, credit transaction business, investment bank business and self-operated business.
[Weekly Review]
○ Expected and unexpected situations
------
A big slump totally overthrows our previous views towards bull market and bear market, and a great surge also does the same thing. Last week saw frequent occurrence of large drop and big surge, and some investors hesitated in being bearish or bullish and missed favor from both sides. At the beginning of last week when the indexes fluctuated sharply, XFA emphasized frequently in XFA Focus, Weekly Review, etc. that short-term fluctuation does not change the trend of a bull market. The adjustment demand might be released soon. In fact, the indexes resumed and created new record just in that week.
Frankly speaking, it is no surprise that the indexes would create new records, but it is unexpected that the new record is set in such a short term. It is within expectation that some stocks go bullish after several months’ adjustment. What’s unexpected is that weighted stocks that experienced huge surge recently also resume rapidly. It should be mentioned that the management are still worried about the rapid surge of indexes, but the stock market itself is an outbreak of collective emotions, so it will either surge or drop too much. It is too hard to stop where it should stop.
What we should ponder about the market in last week is that the punishment on securities companies for their violations on margin trading and short selling is beyond many people’s expectation, but why some people do not change their mind when securities stocks all dropped by the daily 10 percent limit and even dare to go bottom fishing? To be familiar with internal value might be more useful than to catch price fluctuation.
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