First, the initial investment
Before you make an investment, you first need to consider clearly whether the investment is to be held for the long term, such as ten years 10 times as the goal of long-term holding, or just as a short-term speculative behavior. In addition, for market makers, we can also earn spread income, so we will also consider the purpose of obtaining this part of the profits of the investment.
Second, the operation program
In the actual investment process, you also need to take into account the special institutional arrangements of the New Third Board, a comprehensive consideration of the specific stock operation program, which includes the acquisition of shares and the withdrawal of shares.
Specifically for the purpose of investment. If you are really prepared to hold for a long time, of course, the actual "long term" holding is not necessarily ten years, but may be only three or five years, then we have to pay attention to two aspects of the situation, one is the situation of the industry, and the other is the situation of the team.
Judgment of the industry situation mainly includes three points: 1, the growth of the industry, is not with the direction of our country's current policy and the direction of future development coincides with the industry there is the possibility of leveraging on the momentum of substantial growth. 2, the market space of the business, in the industry up, the company's corresponding business whether it can be accompanied by a substantial development of how large the market capacity to accommodate the company's future performance growth. 3, the service of the company's business, the company's business, the company's business, the company's business and the company's business. 3, the relative competitiveness of the service or business, that is, in the process of the industry cake continues to grow, we want to invest in the subject of the product is not able to stand out in the wide range of competition, to obtain the majority of the market revenue. These are some of the points we need to focus on in terms of the industry.
Next is the judgment of the management team. I personally feel that when investing in small and medium-sized enterprises, the team's grasp and judgment is very important, so for the New Third Board listed companies, we hope to see the company's management team has the following three qualities: 1, the team has professionalism, is not we have both know business and technical talents, and understand the capital market talent, team members can do their own duties, in their own division of labor to complete the corresponding work. 2, the management team has a professionalism for the future of the company, the team has a good understanding of the business and technology, and also understand capital market talents, team members can be in their own way, to complete the corresponding work. 2, the management team's conception of the future, commonly known as the ability to draw a pie. Just now Mr. Sun also mentioned that when he was working for a certain fund, the chairman of the board made a special trip to invite them to dinner and drew a cake with them. In fact, it is very important for the chairman to have such an ability, or for the company team to be able to plan out the future of the company. If you want to invest in the management team of the enterprise even their own future are not able to conceptualize completely, but also need you to help them plan and design, or he needs to use the company outside or outside the industry to help him improve the overall thinking, then the management team is not a very competent team. 3, after drawing the cake, the management team has the appropriate execution to make the cake. If it turns out that this is just a pie, then our investment is very likely to face losses. If it turns out that the management team has the ability to execute, based on their past experience, then our investment will be on a much stronger footing.
After focusing on the industry and the team, we should also pay attention to the shareholder structure. A previous guest also mentioned the issue of shareholder structure, for example, some companies that are still in the start-up or growth stage, if the controlling shareholders have a very large proportion of holding, even up to 99%, while the proportion of shares held by strategic investors or employees is very low, or even non-existent, then it is difficult to imagine that there are investors or employees willing to find ways to accompany the company to grow with the company ****. On the other hand, for the start-up or growth stage of the enterprise, in its own relatively small scale has the characteristics of a small boat is good to turn around, however, if the controlling shareholders of the holding ratio is relatively low, the company has introduced a lot of investment institutions, and the interests of these investment institutions are different, then there may be a lot of disagreement in the future in the decision-making process, resulting in the efficiency, so we need to study the company's s shareholder structure to determine whether these potential risks exist.
If you're only going to speculate for a short period of time, which in this case would be a few months, then you'll want to consider the following:
1. Potential shares to be sold. After we get the shares, there may be a lot of other investors in the market at the same time with you also got the shares, then which new shareholders have the will to sell, to sell how many shares, but also to consider which the original shareholders, such as investment institutions, have the will to sell, to sell how many shares.
2, the situation of potential funds to be invested. You likewise have to predict how much potential funds to be invested in the subject of investment will be sought after in the market. These two points actually constitute the short-term supply and demand side of the stock.
3, outstanding share capital considerations. If the liquidity is too large, although the market activity may be relatively good, but the short-term volatility of the stock may be poorer, if the liquidity is too small, it may not be able to meet the demand for investment, there are difficulties in withdrawing, but also may face accusations of manipulation. We should consider these potential risks together.
4, absolute price. At present, the minimum number of shares entrusted to the new board is 1,000 shares per hand, if the price of the shares is more than 100, the minimum entrusted to 100,000 yuan, and therefore its liquidity is bound to be affected by the absolute price. The liquidity of stocks with slightly lower prices will be relatively better.
Finally, as market makers, we also need to look at some of the factors that may affect spread income in the future. There may not be a lot of market makers in this room, but in light of the repeated policy statements about the need to liberalize market-making licenses in the future, you, the guests from the investment institutions, may also need to consider this aspect in the future. Specifically, after making a market in a stock, we need to consider the turnover and volume of the stock, the turnover rate of the stock, the trading spread of the stock, including the bid/offer spread and the actual bid/offer spread, and lastly, the price volatility, that is, the volatility of the stock price on a daily basis or over a period of time, and all these factors are closely related to the income from the spread.
Finishing with the programmatic considerations of the initial investment, we move on to the operational considerations, that is, the issues that should be taken into account in the two key areas of entry and exit.
In terms of stock acquisition, we *** there are four different ways: 1, the original price of directional issue. For example, the previous CSCI 18 dollars of additional issue, if the proposed to be able to get the original share, then you can get the stock at the original price of 18 yuan. 2, premium directed issue. But for various reasons you may not be able to get this share, then you can also through other channels, in the case of the burden of some of the costs or premiums directly or indirectly to get the share of the directional issuance, which also belongs to the market behavior. 3, directed to the transfer of the old shares, in the agreement mode or listed before you may with the company's old shareholders to reach a transfer agreement to an agreed upon price for the transfer of the transfer of old shares, obviously more efficient than the directional issuance of shares. The efficiency is obviously higher than the efficiency of the targeted increase. 4, non-targeted market transfer, of course, you can also buy shares directly from the secondary market, at this time you need to consider whether you can buy the target number of questions.
Relative to the acquisition of stock in a variety of ways, the stock exit channels are relatively small, there are mainly two ways: 1, directed bulk trading, whether under the agreement or the future may introduce bulk trading channels under the market-making approach, in the current level of liquidity want to large-scale reduction if you don't find offline to find a counterparty to undertake the stock and forced to reduce its difficulty, it is quite large, so the targeted bulk trading is reasonable, the market is the most efficient way to buy stocks. Therefore, directional block trading is one of the reasonable way to exit. 2, non-directional market reduction. Of course, if you have enough patience and are willing to bear the higher shock costs, then you can also choose to sell directly in the secondary market.
These are the only two exit channels available at the moment, so as the guest just said, sophisticated institutional investors are not currently using the new third edition as a mature exit channel. I think it is not that these investment institutions are not willing to use the New Third Board as an exit channel, but only that the New Third Board does not yet have the conditions to become an exit channel, and if the circulation link is further improved in the future, the investment institutions certainly will not object to using the New Third Board as an exit channel.
Next, I'd like to share with you three cases of listed stocks, in which I will continue to discuss some of the content mentioned earlier.
The first case, Jindalai (830777 ).
This company belongs to the ecological environmental protection and environmental governance industry, mainly engaged in complete sets of sewage treatment equipment, overall solutions, investment and operation services, the company engaged in the business of environmental protection industry, in the country more and more emphasis on environmental protection under the premise of the continued rapid development. 2013 earnings per share is 0.76 yuan, 2014 reached 1.57 yuan, the performance of the faster growth. The concurrent oxygen FMBR technology and JDL-heavy metal wastewater technology in wastewater treatment have reached the international leading level. The management and operation team have been y cultivating in this industry for many years and their professional ability is very strong, as we judge that its management team and operation team meet our requirements on the team aspect. In addition, the company's shareholding structure is relatively reasonable, the actual controller's control is relatively strong, the introduction of some investors in the early stage, but we judge that the company's future decision-making will not have too much impact.
Jindalai in the market after the initial price of 30-40 yuan range, in April when the run to a relatively high level, breaking through the 100 yuan mark. In the downward spiral that began in late April, the stock has remained very firm, with the price staying in the $100 range after reweighting. Before a few of the recent predators switched to market making, this stock had one of the highest market capitalizations of all market making stocks, and its current market capitalization is around $8 billion. In retrospect, we believe this underlying stock meets our previous industry and team requirements for a long-term investment stock, while its equity structure is relatively reasonable, thus we believe this stock is indeed suitable as a long-term investment underlying.
The second case, a market-making stock.
This case is to discuss the short-term investment opportunity. This stock announced before the market to be directed to increase, so after the market we see the price of the market, can we consider participating in this directed to increase? In accordance with the previously introduced points of judgment, first of all, the original shareholders before the directional issue of the desire to sell is not big, at the same time in this judgment when the market happens to be in a relatively active period, we judge that the amount of money into the market is still relatively large, and the fundamentals of this stock is not bad, it should be pursued by potential investment funds, the circulation of the share capital is relatively moderate, the absolute price is also relatively low.
From the above analysis, and with reference to the market price at the beginning of the market, participation in this fixed increase may get relatively good short-term returns. From the moment the new shares were about to be registered, along with the overall market downturn, the stock price began to go all the way down until the lowest point than the fixed price is only slightly higher than 10%. From the circulation of the new shares to date, the actual turnover rate of the stock is at a low level, and the new investors in this fixed-income increase could not complete the exit. The fixed increase *** introduced more than 20 investors, most of them are individual investors, they hold the number of shares in the range of 200,000 shares -500,000 shares, it is clear that the short-term investment behavior for the purpose of the expectation that it can be realized as soon as possible so that the flow of funds. But unfortunately, the objective conditions are not sufficient to realize the planned short-term investment and profit-making behavior.
What is the reason for this? Since we have previously analyzed that fixed income is indeed a good short-term investment opportunities, why would there be such a problem? I think there are two problems with the previous analysis. 1, although the original potential sell shares is not high, but the directional increase in the introduction of the investor's desire to sell is extremely strong, resulting in a short-term supply is too large. 2, due to the entry of the market, we judge that there is a desire to buy more money, but in fact, all of these funds or the vast majority of these funds in the pursuit of a variety of fixed-price increases, and is not committed to the secondary market investment, and therefore actually on the secondary market, the market is not the most important thing. However, in reality, all or most of these funds are chasing various fixed-income rights issues and are not committed to investing in the secondary market, thus there are actually fewer potential funds in the secondary market, making short-term demand too small. From this we can see that there were problems in the previous analysis of supply and demand, which led to the wrong prediction and ultimately led to the current situation.
The third case, Jinyu Nongmu.
This case is introduced to illustrate how market makers should be evaluated if they want to earn spread income. This stock has just made a market soon, the current share capital of more than 27 million shares, the absolute price is low. Since the market to date *** 17 trading days, its total trading amount is 43 million yuan, the turnover rate of 60%, this data if annualized is quite considerable, the daily price fluctuations are also considered relatively large. Roughly calculated, the average daily turnover of this stock is about 2.5 million yuan, and three market makers are currently involved in market making, so if the spread is calculated at 2%, each market maker can earn an average of nearly 8,000 yuan per day spread income. We can look at the fixed announcement, our initial cost is 2 yuan, *** get 1 million shares, if this stock can continue to maintain the current level of trading, two hundred trading days a year counting, we can reach 80% annualized rate of return.
What is the point of introducing this case trying to illustrate? In fact, as a market maker, we are more than happy to invest in this kind of liquidity, can be traded to obtain a stable spread income of market-making stocks, so that you can earn a stable spread income like a bank. We do not want to steal the business of investment institutions by acquiring stocks at low prices and expecting them to increase in value by several times before selling them, which is not the function of a market maker in the market. This is not the function of a market maker in the market. We would like to return to the origin of a market maker, which is to select and trade underlying stocks for the purpose of earning a stable spread income. However, the current rule system and objective conditions are not yet able to realize this, and we have to bear the risk of loss of stock shares. In line with the principle of matching risk and return, we are forced to take the income from stock appreciation as the main source of income at present, but in fact, we would prefer to provide the market with liquidity in exchange for a stable spread income, so that all parties involved in the market can earn their own profits. According to the spirit of the SEC notice, the future may allow market makers to borrow securities for market making, or provide hedging tools to hedge this part of the risk, in order to allow the role of market makers to return to its roots, focusing on providing liquidity for the market.
From this, I have the following rough suggestions for the market participants for your reference:
1, to the regulator's recommendations.
The financing function of the current market has been fully realized, the previous statistics as of the end of May this year's total financing has exceeded more than 20 billion, more than the sum of last year, this year may reach last year's total of more than 5 times. It can be said that our small and medium-sized enterprises as long as you want to finance the money, in the new three boards on the situation there is no financing can not be, directional issuance of all be coaxed, even if the price is too high, there will be investment institutions to undertake.
However, over-emphasizing the convenience of financing will actually erode the interests of secondary market investors more seriously, so how to take into account the interests of all parties in the market, and improve market liquidity under the premise of maintaining the current good financing function is a problem that regulators need to focus on. In this regard, I suggest that regulators should stand at a higher level and consider the revision of the relevant rules with a strategic global vision. The previously rumored modification of the current agreement transfer mode and the increase of the bulk trading channel under the market transfer mode need to be incorporated into the global rule revision, and of course, the rules of directional issuance need to be appropriately revised so as to achieve the goal of further safeguarding secondary market investors' interests on the premise of further safeguarding the good financing function without affecting the operation of the secondary market. The premise is to further protect the rights and interests of investors in the secondary market.
Some people think that by liberalizing the market-making license, we can introduce incremental capital to make markets and solve the problem of liquidity in the secondary market, which I don't agree with. There is no lack of capital in the market, but there is a lack of investors with diverse objectives, so I suggest that the regulator can vigorously introduce investors with different investment objectives. There are more financial investors among the newcomers in the current market, and they mainly capture short-term investment opportunities. Many private equity funds established in the market, its main investment is to find ways to obtain the shares of the directed increase, and then sold in the market to engage in short-term trading behavior. The current market, such as PE, VC institutions such as medium- and long-term holding of stocks for the purpose of investment institutions or very few. On the other hand, the current market has a high proportion of institutional investors. As an institutional investor, its investment volume is relatively large and its investment philosophy is relatively close to that of the market, thus it does not match with the market's current trading methods, such as not being able to complete the work of building a position purely in the secondary market, and thus it is necessary to obtain shares directly from the company or the original shareholders in order to satisfy its own requirements. We have always emphasized that the NSSB is a market for institutional investors, but the trading rules of the market are not entirely applicable to institutional investors, so I suggest that the regulator should introduce other types of investors with a lubricating effect. Based on these, I would also like to make a suggestion is to link the minimum number of mandates for marketable stocks to the share capital, with 5,000 or 10,000 shares as the minimum number of mandates for stocks that meet certain criteria, which would also be more in line with the investor-oriented market positioning.
2. Some suggestions for investment organizations.
For investment institutions, I suggest that we treat several situations with caution: First, the liquidity of the disk is small, for the reasons already mentioned; second, the liquidity is low, especially in the market after the secondary market liquidity is still low, it is necessary to give full consideration to the degree of fairness of the market price; third, the potential dumping is heavy, for example, most of the participants in the fixed-price increase of the majority of individual investors or short-term speculation for the purpose of the Institutional investors in the stock, its short-term selling pressure will be heavier; Fourth, there is no specific investment plan for the fixed increase of the company, many companies are now to replenish the liquidity of the purpose of fund-raising, in fact, the reason for this is more false, although this helps the market financing function, but in fact, many companies do not have a good future planning has begun to raise funds. Previous guests have also raised, currently in the market to get money is very easy, but exactly how to spend the money is still a learning experience, some companies take the money to buy financial management or set up a special fund to invest in the new third board, which may have problems; Fourth, there is the introduction of surprise financial investors in the company, such as in the listing of the company before the issuance of a low-priced issue to their own friends and relatives or relations, in the face of such a situation investors need to consider carefully.
In addition to the investment team, I recommend that we treat several kinds of teams with caution: one is overly concerned about the capital market and capital operation of the team, we hope that the proposed investment in the industry and their own business has a very deep attainments, and continue to focus on their own business, the capital market, they will hire professionals to take care of, or believe in intermediary institutions of the judgments, rather than the end of the day, and the end of the day. Every day, they are thinking about how much the stock price is and how much the shares are worth; Secondly, the team that has a grand vision that is beyond its capacity, many entrepreneurs are happy to describe a grand vision, but in fact, to realize this vision requires a lot of capital, resources and capacity, capital may be a very good solution in this market, but the resources and capacity are not readily available;
Thirdly, companies that pay attention to short-term interests and ignore long-term image, are not the only ones that have the ability to achieve their goals. The third is to pay attention to short-term interests and neglect the long-term image of the company, there is such a case, a company issued a fixed-income program and customers are paid, found that the market price rose, think the price of the issuance of low on the return of all the contributions, open a meeting to the last program to re-negotiate, and then increase the price to re-issue a program, this enterprise is too much attention to short-term interests, but ignored the long-term image of the company, the lack of integrity, so that the team is also This kind of team is also needed.
3, to the listed company recommendations.
If there is a chairman, general manager, or secretary of the listed company here, I hope you can refer to the following suggestions.
One is the prudent use of financing tools. This includes rational planning of the rhythm of financing, try to avoid just issued a round of fixed-price increase not half a month and then issued a round of fixed-price increase, especially two fixed-price increase the price difference is also very big situation. If there is no reasonable planning and in the short term to take advantage of the market heat of large-scale financing, the pressure on their own nine very big, so I hope that we can rationally plan the rhythm of financing. The financing rules designed by the regulatory bodies are meant to fulfill the purpose of small, fast, flexible and on-demand financing for SMEs, which means that financing can only be started in the market if there is an existing demand. If we are obsessed with using the market to get the money first, then in the future when you really need money may nine may not be able to get financing. In addition the price and size of the directional issue needs to be set reasonably, usually the valuation of the financing is a round than a round to be higher, if the enterprise only see the short-term interests and set the current financing price is very high, then the pricing of the next round of financing will face a lot of pressure, and if the price falls will also affect the corporate image. Finally, it is important to consider the introduction of strategic investors and short- and medium-term financial investors in a comprehensive manner. As a financier, it is best to introduce funds to achieve a reasonable allocation of long, medium and short-term, strategic investors can bring you resources and channels, and short and medium-term financial investors can be fully traded in the secondary market to improve the liquidity of the stock, if the financing only includes a certain type of investor, then the follow-up may be faced with different problems. In summary, I suggest that the listed companies can be careful to use financing tools to fully protect the market strongly support the status quo of the regulation of financing, do not overuse the rules to drill holes in the future of their own road are blocked.
The second is the prudent use of the secondary market. Listed companies to rationally plan for executives and employees to increase and decrease their holdings plan, many GEM companies have been criticized is a listed shareholders will begin to reduce their holdings and cash, but in fact, this has a certain degree of reasonableness, because we need to create a wealth effect in order to attract more investors to enter the market to invest in the same time, but also to attract more aspiring young people to start their own businesses. But this plan to reduce the holdings must be reasonable planning, do not cause a stampede of accidents, otherwise it will also affect the investor's confidence in the enterprise's investment. In contrast, listed companies should refer to the main board and GEM companies, without violating the corresponding laws and regulations and the company's articles of association under the premise of the development of stabilization of share price commitments and constraints, in order to face the market drastically down or fluctuations in the situation.