Nearly 20% Of The Stocks In The Past Three Years, The Compound Growth Of Net Profit Has Exceeded 30%, And The "Gold Rush" Of Institutions Has Not Stopped

"Pseudo market value management" storm, the market recently on the small market value of individual stocks fear like a tiger.

At the same time, the market is increasingly pessimistic and disappointed about the small market value of individual stocks.

Previously, there was a market rumor that asset management of some securities companies was discussing removing stocks with a market value of less than 20 billion yuan from the stock pool, and the stock must meet the standard of an average daily turnover of more than 500 million yuan in 20 days. What's more, some people in the industry claim that "companies with a market value of less than 3 billion will not be able to enter the optional pool of institutions at all.".

But in fact, only from the performance in 2020, many small market value listed companies still perform well.

According to Ifind data statistics, as of May 24, there were 1031 "standard" small market value stocks with a market value of less than 3 billion yuan. In the case of containing a large number of ST shares, there are still 490 stocks of which the net profit of the parent company has achieved a positive growth in 2020, and there are many performance explosion stocks whose net profit growth rate is more than 100%.

"It is undeniable that the stability of the development of individual stocks with small market value is poorer, but the upward elasticity of their performance is definitely greater. Different investors must have different asset allocation needs. It is definitely not in line with the investment logic to completely ignore the potential high growth of high-quality stocks. " A private fund in Shanghai said.

High growth and enrichment of small market value companies

For listed companies, the market value is the direct embodiment of its development scale, and also determines the liquidity and volatility frequency of individual stocks to a large extent.

According to wind data statistics, as of May 24, of the 1031 stocks with a market value of less than 3 billion yuan, 643 stocks had a market value higher than 2 billion yuan, 363 stocks were in the market value range of 1 billion to 2 billion yuan, and the remaining 25 stocks were less than 1 billion yuan, and almost all of them were ST shares.

In fact, under the influence of the intensified fluctuation of A-share market and the "pseudo market value management" storm this year, most of the small market value stocks have not achieved good market performance. From the beginning of 2020 to now, only 300 stocks with a market value of less than 3 billion yuan, less than one third of the total number, have achieved a cumulative rise.

But judging from the scale of net profit, there is no lack of target with excellent profitability in small market value stocks.

According to the data, only 281 of the 1045 small value stocks will lose money in 2020. Among them, 129 stocks will have a net profit of more than 100 million yuan in 2020, such as Lianfa, baolaite, Ningbo Lianhe, Tiandiyuan, Donghong and Sijiyuan, which will achieve a net profit of more than 300 million yuan.

On the contrary, the loss scale of small market value stocks with negative net profit is also very alarming. 31 stocks lost more than 1 billion in the whole year, and * ST Xishui lost 8.643 billion yuan in 2020 due to its parent company, which also lowered the average net profit of all small market value stocks to about - 80 million yuan.

"In fact, it also reminds investors that there is no right or wrong in pursuing high growth small cap stocks, but we should choose the target carefully and do not have speculation on potential delisting stocks." The private fund said.

In contrast, the growth of 1031 small market value stocks shows that 490 stocks will achieve a positive growth in net profit attributable to their parent companies in 2020. After lengthening the time span, the growth of individual stocks is also more prominent. Among the 770 stocks with small market value, 437 stocks with positive growth rate of net profit attributable to the parent company in recent three years, 153 shares with growth rate exceeding 30%, accounting for nearly 20% of the total.

It is worth mentioning that although there have been rumors that financial institutions, including asset management of securities companies, have more or less set the market value threshold of stock pools, excluding small market value stocks from the scope of investment. However, according to the reporter of 21st century economic report, most institutions have not set market value threshold specifically, and from the survey, small market value stocks are still concerned by institutions.

The 21st century economic reporter found that from the beginning of 2020 to now, a total of 2128 A-share listed companies have received online and offline research from various investors, among which 365 stock markets surveyed are worth less than 3 billion yuan. As an important investment target, small market share still has a place in the stock pool of various institutions.

Institutions don't take market value seriously

"Some people say that companies with a market value of less than 3 billion do not look at companies with a market value of more than 20 billion, which is wrong in itself. It's important to invest in the right direction. The most important thing is to judge whether an enterprise can grow, create value and create returns, rather than say the size of the company's market value or how brilliant it has been. " Deng Xiaofeng, chief investment officer of Gaoyi assets, said recently that the market has questioned small market value companies.

After comprehensively evaluating the current position structure of professional institutions and the growth potential of the company, Deng Xiaofeng believes that the pressure of return on investment faced by relevant majors in the future is relatively low, and "it is necessary to look for companies that can bring better returns in the future".

Yan Xiang, chief strategic analyst of Guoxin Securities Economic Research Institute, pointed out that the profit volatility of small market value companies is greater, and in the economic recovery and profit upward cycle, the resilience of upward repair of performance growth may be greater.

From the perspective of historical performance, compared with CSI 300 index, the performance elasticity of CSI 1000 index is greater, which can fully enjoy the benefits brought by economic recovery and obtain higher performance increase. For example, in the economic recovery brought about by the promotion of supply side reform in 2016, the profit growth rate of CSI 1000 index was far higher than that of CSI 300.

In addition, Yan Xiang also pointed out that the current valuation of small companies is at a relatively low level, the valuation of super large cap leading stocks is relatively high, while the value of sub industry leaders and small and medium cap stocks is still in the valuation depression.

"Historical experience shows that any asset investment needs to consider the level of valuation. Even if the performance of the overvalued stocks is very good, the probability and absolute rate of return of the investment are not high. Even if the asset quality is good enough, it is not a good investment if the valuation level is too high. " Yanxiang expects that the future capital may overflow from the high valuation sector to the early undervalued sector, and the subdivided leading stocks and second-line blue chips are expected to usher in opportunities.

"In essence, a small number of head companies will always be winners, but the growth of small companies is better, so we should evaluate them from a more objective dimension." Deng Xiaofeng also said that at present, there are many opportunities outside the head company. We should capture the investment target from the opportunities of market, industry and enterprise development, rather than simply construct the investment portfolio based on the market value. If there are significant development opportunities in individual industries, the small market value companies in the research industry may have better returns.

It is worth mentioning that Yan Xiang also proposed that the rotation of large and small market style is the normal stock market. From 2016 to now, the A-share market is a significant dominant style of large cap stock price performance. In the case of the current market differentiation to the extreme, there is a strong possibility of style switching in the future market.