1400 points how to seize the opportunity

The stock market is up, and investors are both happy and nervous. The happy thing is that the stock market has seen the hope of making money again. The nervous thing is whether the current stock market is the top. After all, after many years of bear market, investors still have lingering fears about the decline of the stock market.

The average price-earnings ratio is no longer underestimated

The Shanghai Composite Index began to rise on December 6 last year. It has been nearly 5 months since then, and the index has risen by more than 30%. The fundamental reason for the surge in the index is undoubtedly the stock reform. Before the share reform, the valuation level of China's stock market was already relatively low, and the share reform paid a certain consideration to the shareholders of tradable shares, which lowered the investment cost and further lowered the valuation level of some companies, thus attracting OTC funds to enter the market.

So, after the index has risen more than 300 points, is the stock market still worth investing in? As of April 24, a total of 1,149 companies have released their 2005 annual reports. These 1,149 companies achieved a total net profit of 179.7 billion yuan last year, while the total net profit of these companies in 2004 was 170.2 billion yuan, a year-on-year increase of 5.6%. According to last year's performance and the closing price of the last trading day in 2005, the weighted average price-earnings ratio of these 1,149 companies is about 17 times. Considering that there are still quite a few companies that have not completed the share reform, the actual price-earnings ratio is about 15 times. . By April 24, the weighted average price-earnings ratio of these companies rose to about 20 times, even taking into account that some companies have not completed the share reform, the average price-earnings ratio was about 19 times.

Because most companies that do not publish annual reports have poor performance, the average price-earnings ratio of the Shanghai and Shenzhen stock markets will rise after all annual reports are published. Affected by the rising prices of raw materials, the performance of listed companies in 2006 is also difficult to have a big increase, and it is not bad that there is no decline. Under the premise of no growth in performance, the current price-earnings ratio is not too low, and the fundamental basis for the overall strengthening of the stock market is not solid.

There are still opportunities for individual stocks

Although the overall strength of the stock market lacks the support of fundamentals, it does not mean that there will be no investment opportunities after the market reaches 1400 points. Recently, despite the decline of most stocks, the stock index can still continue to rise, indicating that the trend of a small number of stocks is quite good, and the opportunity still exists.

Despite the increase in average price-earnings ratios, there is still a considerable pool of undervalued companies. For example, the 100 companies with the highest net profit achieved a total net profit of 148.1 billion yuan last year, accounting for more than 80% of the total net profit. The average price-earnings ratio of these 100 companies is only 13 times, and there is still an undervalued phenomenon.

As the index goes higher and higher, it becomes more and more meaningful to mine undervalued stocks. Compared with popular stocks, the trend of undervalued stocks does not seem to be eye-catching, but it is relatively safe to invest in such stocks, and the room for downside is limited. Once its value is recognized by investors, it will bring great returns to investors. A key factor in investing in such stocks is to have a good attitude. Don’t pay too much attention to short-term stock price fluctuations. As long as the fundamentals have not changed significantly, you can hold them for a long time and wait for the day when their value is discovered. .

With the steady progress of the share reform, there are still opportunities for those undervalued stocks to be merged. For example, the integration of subsidiaries by PetroChina and Sinopec will not dilute the company's performance on the whole. The acquisition is cost-effective and beneficial to both the acquirer and the acquiree. Conversely, acquisitions are difficult to carry out. For example, one of the main reasons why Bailian Group cannot implement the integration of Hualian Supermarket is that Hualian Supermarket's share price is too high and the acquisition cost is high, which is not cost-effective for Bailian Group.

In the process of mergers and acquisitions, foreign capital is also a force that cannot be ignored. Domestic steel, finance, beer, cement and other industries can all see large-scale acquisitions by foreign investors. Among them, the steel industry is more likely to be favored by foreign investors due to its low price-earnings ratio and price-to-book ratio, high dividend rate and important strategic position. The integration of resources within the steel industry will also become the highlight of the "Eleventh Five-Year Plan" period. Therefore, investors should attach great importance to the steel industry.

In addition, there are still short-term opportunities for companies that have not implemented the share reform. From the statistical point of view, most of them can get some benefits by actively participating in the share reform and throwing it out after the share reform gets the consideration. For example, Aerospace Technology, which became a G-share on April 25, had a closing price of 4.71 yuan before trading suspension, and the consideration was 10 for 2.9 shares. The cost price calculated based on the closing price before the suspension was 3.65 yuan. The average transaction price was 3.79 yuan, and the profit was 3.8% (excluding handling fees). Of course, there are also some companies that will post their rights after the implementation of the share reform, just like the G Guomai that resumed trading one day. But on the whole, the companies that post the right are less than the companies that fill the right.

Risks cannot be avoided

With the continuous rise of the index, the risks in the stock market are also accumulating. After all, the stock market today is no longer a stock market below 1100 points, and the index has risen not small. stocks are more risky. For example, the non-ferrous metal sector, the most beautiful recently, benefited from the substantial rise in the price of non-ferrous metals, but the basis for this price increase is not stable, and the signs of artificial speculation are relatively strong. Once profit-taking of speculative funds, non-ferrous metals The price of the metal will also return to a reasonable value, which will drive the stock price of the non-ferrous metal sector to fall. It should be said that the current non-ferrous metal sector is completely following the price trend of metal futures, and its inherent risks are still relatively large.

Among the popular stocks, there are also quite a few individual stocks that are just taking advantage of the topic and simply speculating on the concept. For example, Guiyan Platinum, originally mainly engaged in the production of precious metals, is now undergoing a shareholding reform, and the major shareholder is preparing to buy 98% of the equity of Yuanjiang Nickel. The major shareholder expects that the purchased assets will increase the company's earnings per share by 0.15 yuan per year. When the company makes profit forecasts, it is impossible for the company to not take into account the rising price of nickel metal. Therefore, we cannot hold on to the company's future performance. There are high fantasies.

In 2005, the company's earnings per share was 0.05 yuan. It is impossible for all the profits of the assets to be accounted for this year. The earnings per share in 2006 are close to 0.20 yuan, which is not bad. On April 25, the stock has risen to 12.46 yuan. Considering that the share reform consideration is 1.4 shares for every 10 shares, the shareholding cost is 10.67 yuan, and the price-earnings ratio is more than 50 times. Even if the earnings per share are calculated at 0.25 yuan, the price-earnings ratio has exceeded 40. times, which are riskier stocks. On April 25, the stock continued its daily limit, and the risk was still increasing. Another nickel industry stock, Gene Nickel, traded at 17.57 yuan on April 25, while the company's annual earnings per share were predicted by consulting agencies to be around 0.9 yuan, with a price-earnings ratio of less than 20 times.

There are many similar stocks. For example, China Tungsten High-tech is a loss-making stock. The company expects to still lose money in the first half of the year, but because there is a "tungsten" in the company name, it is considered a non-ferrous metal sector. At the beginning of the year, it was more than 3 yuan, and it has risen to more than 9 yuan now. Obviously, the speculation is very high and the risk is extremely high.

Grasp low-risk investment opportunities

No one can avoid risks, but they are completely controllable. With the increasing abundance of financial products in the stock market, some low-risk investment opportunities are also presented to investors.

In the past few years, convertible bonds have been a good low-risk investment product. As a bond, convertible bonds will repay the principal and interest when they mature, and capital preservation is not a problem. Once the corresponding stock has risen sharply, the bond can be converted into stock according to the conversion price to obtain a higher return on the bond. For example, Minsheng Convertible Bonds fell below the par value in the initial stage of listing. Later, the stock price of Minsheng Bank rose sharply, which led to a sharp rise in the price of Minsheng Convertible Bonds. In more than half a year, the highest increase exceeded 40%. Since refinancing has not yet resumed, and a large number of convertible bonds have been eliminated in the process of share reform, there are fewer opportunities in convertible bonds than before.

However, with the issuance of put warrants, the combination of underlying shares and put warrants has become an effective way to reduce risk. Among them, the best example is Shanghai Airport. During the stock reform of Shanghai Airport, some put warrants were sent. The exercise price of the warrants was 13.6 yuan, while the closing price of Shanghai Airport on April 25 was only 11.59 yuan, and the closing price of the airport put warrants was 1.692 yuan. Only 13.282 yuan, 0.318 yuan lower than the strike price of 13.6 yuan. If the investor invests in the ratio of 1 share plus 1 put warrant, after the warrant expires, he can sell the stock in his hand at a price of 13.6 yuan.

Without transaction fees, investors can realize a gain of about 2.4% in less than a year. In other words, the preservation of such a portfolio is not a problem. On April 26, Shanghai Airport's stock rose sharply. Although the airport put warrants fell sharply, the sum of the two still reached 13.7 yuan, which was higher than the exercise price. At this time, investors can sell their investment portfolios and cash in profits. . At present, there are no similar opportunities for other put warrants and underlying stock portfolios, but with the increase in the number of warrants, such opportunities will appear again.

Also, closed-end funds, which we have mentioned many times, are also very good low-risk products. Although closed-end funds have seen a large increase, due to the existence of discount rates, investment opportunities for closed-end funds still exist. In a sense, investing in closed-end funds with a high discount rate is equivalent to discounting the risk. Those closed-end funds with longer maturities and higher discount rates should attract more attention from investors. As the fund is prosperous, it will expire on November 5, 2014, and it still has about 8 and a half years to expire. The closing price on April 21 is 0.61 yuan, and the net value of the unit is 1.1021 yuan. If you buy it at 0.61 yuan, it will be opened after expiration, and if the net value remains unchanged, you can get an income of 80.67%, which is equivalent to an annual rate of return. was 7.2%. If the net worth rises by 3% per year, it can get 132.28% in 8.5 years, and the annual yield reaches 10.4%. In fact, in the past 6.5 years, the net worth of Tongsheng Fund has risen by more than 5% annually, and it is not difficult to achieve a net worth growth rate of 3%.

Based on the above analysis, we believe that although the risks in the stock market are increasing, opportunities still exist. Only by seizing opportunities and controlling risks can we make a difference in the current stock market and gain something.