Category: Money Tips Date: 2006-07-02
Pilot-tradable shares after the company introduced the industry generally agreed that pricing power will be a test of strength of the preferred investment bank brokerage targets. Why do I say that? In my opinion, allowed the circulation of non-tradable shares, the stock price back to the real value of the stock range, accurate positioning of the value of the stock, will determine a reasonable stock price, which also answered the question: tradable shares do not have to after the fall However, it will fall into the value of a rational range. This is why the ability to examine the reasons for broker pricing.
In the current flow of non-tradable shares has not yet the case, why stock prices fall? Essentially there are two possibilities: First, the overall price is still overvalued, overvalued shares and the future entry of new shares with a system of arbitrage effect, the stock prices will fall; Second, even if a single stock is not high estimates, but because of lower cost non-tradable shares held, in the short term with the pressure effect on stock prices, stock prices fall into the irrational. However, this irrationality can only be a short-term decline, the stock fell below the value will make the stock "value for money" to produce short-term and long-term arbitrage effects, so that the value of the stock return to the range. It is also generally recognized by the industry, the share-trading reform, the stock price will be the most core content.
In order to avoid the irrational non-tradable shareholders to sell stock to happen, the system is implemented to sell non-tradable shares of deferred constraints, while taking measures to compensate for the outstanding shares, which is equivalent to increased holdings of non-tradable shareholders the cost of and diminished its selling power.
Based on the above analysis, we can determine the value of non-tradable shares in circulation of the right of new ideas: that a reasonable judge the intrinsic value of the stock, the correct calculation of the cost of holding non-tradable shares, then the non-tradable shares to tradable shareholders, the shareholders is equal to the amount of compensation per share value of the stock minus the cost of share holdings of non-tradable shareholders.
Need to note here is: any point on the current stock price does not mean that the value of its shares; the stock value is the theoretical value, and can assess the relative value of the scientific method of determination; non-tradable shareholders of the holding cost is also a need to be convert it with the same value of point in time.
Application of this method, the cost of holding non-tradable shares can be measured, and its difficulty is the determination of stock value. In view of the particularity of the Chinese economy, access to certain or certain types of stock valuation method may not be fully applicable. Net asset value of corporate accounting in accordance with the vast majority of business is clearly inappropriate; to companies based on discounted future cash flows of the economic profit law and the discounted cash flow valuation method is difficult in the majority of Chinese enterprises in which the growth cycle of poor determined that future cash flow uncertainty, particularly where there are not many companies for many years the phenomenon of dividends; the use of the relative value of models is difficult in the stock market price-earnings ratio is currently a lack of comparability, especially in the transformation process, the lack of comparability of the short-term earnings targets, while the peripheral mature markets also affected by a variety of constraints, needs to be done before the use of appropriate adjustments.
But in any case, no one always has its share of the value of the relative range, as long as we find this value, market volatility will also find a room for rational discussion, but also be able to rationally determine the "right price" criterion.
In the published price of the four companies on the grounds, have referred to "can not reduce the outstanding shares of shareholder value." However, the value of the outstanding shares of how to measure it? If the secondary market price is clearly a lack of basis, the value of outstanding shares should also be the value of their transfer or their holding period net present value of cash flow. In the short term regardless of what the program, in order to protect the interests of the Unit in circulation only to maintain the stock price may not fall, in the case of overvalued stock prices is obviously difficult to grasp. Therefore, perhaps only until all listed companies to return to the respective value of central China's stock market can be stabilized.
