Many friends who are concerned about the breeding industry know that Jiangxi Zhengbang had a lower limit yesterday, which brought the industry down a bit.
The reason behind it is that it is going to be ST. The new ST rule eliminates the 2-year loss, but retains the “negative net assets”. According to Zhengbang’s situation, it is impossible to escape.
Institutions cannot buy after ST, so there will be 1~3 lower limit due to trading factors, generally speaking.
ST is actually the cradle of A-share big bull stocks, because once the cap is successfully removed, the previous suppressing factors will turn to drive upwards. As long as the benefits are large enough, there will always be dealers willing to participate in the operation of ST, and the bottom to the top will rise. 5 times, considering various costs, can also earn more than 1 times. For example, installing an asset, shareholder restructuring and the like.
However, you may have to be careful with Zhengbang’s participation. It’s also a profit at the bottom, which is different from Weir. The reasons are as follows:
1) The same point of the two is the bottom of the cycle. Pork has entered the third-level pig-to-food ratio warning and the entire industry is losing money. Semiconductors have experienced a 1.5-year cycle downturn, and some players began to lose money in the second half of last year. But investing in cyclical stocks, the premise is that the company can survive until the next economic cycle comes. As a leader in consumer semiconductors, Weil’s CIS camera chips can be used in many fields such as mobile phones, automobiles, security, and VRAR. The competition pattern is good. Although the degree of innovation and imagination is not enough, it is no problem to cross the cycle.
2) Zhengbang is the last few players in the industry. To measure the operation level of breeding enterprises, we generally use an indicator called “full cost” , which refers to the cost per catty of pork after considering various expenses, which can best reflect The company’s cost control and large-scale farming capabilities. The full cost of Zhengbang is 10 yuan per catty, which is 2 yuan higher than that of Muyuan at the top, and 1 yuan higher than Wen’s and New Hope. At the bottom of the cycle, Muyuan can continue to expand production and seize share under the premise of small profits, but Zhengbang can only passively withdraw due to cash loss, resulting in a vicious circle.
3) In fact, the tragedy of Zhengbang is also the epitome of many dog-gambling enterprises, such as Evergrande. Their unit profit model is not good enough, and their actual management and operation levels are average. However, when the industry is still growing, they dare to increase leverage and make a few right bets to become the industry leader. But when the industry has no room for growth and becomes a completely cyclical industry, their extensive management style and lack of risk control awareness will become a fatal blow.
4) Even if the original main business of ST shares is poor, they generally have a game value , which is to bet that a banker will come in to install assets or change shareholders, but it is not suitable for Zhengbang. The first is that the plate is too big, the second is that there are too many debts, and the third is that the interests involved are huge (for example, considering local employment, you can’t just close the pig farm).
Finally, let’s talk about the impact of Zhengbang’s thunderstorm on the industry. Simply put, it is “short and short and long and long”.
The short-term market is interpreted as negative, the first is the sector linkage, and the second is muscle memory (A shares are urine).
In the medium and long term, although Zhengbang may not have the value of buying bottoms, this incident means that the bottom of the pork-breeding sector has been established for the second time. There is a saying in the Book of Changes that “the dragon fights in the wild, and its blood is black and yellow”. Generally, when the cycle bottoms out, it needs an outbreak of the demand side or a clearing of the supply side. The clearing of production capacity requires the collapse of a big player as a landmark event.
$Cultivation ETF(SZ159865)$ $Muyuan Shares(SZ002714)$ $Xuerong Biology(SZ300511)$
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