Buffett’s shareholders are most afraid of rising stock prices. A-share investors are puzzled. Now, after looking at the trend of Kunming Longjin Pharmaceutical Co.Ltd(002750) and the reduction plan of major shareholders, do investors also start to be afraid of rising stock prices? Investors should be vigilant about the routine of increasing and reducing holdings.
From the trend of Kunming Longjin Pharmaceutical Co.Ltd(002750) , the company’s share price started from more than 7 yuan, up to 24.09 yuan, an increase of more than 200%, followed by the company’s controlling shareholder and second shareholder announced to reduce their shares on January 7 and January 13 respectively, and the proportion of reduction was as high as 3.19% and 6% respectively. Therefore, investors will wonder whether the company’s share price is fried high, and then the major shareholders will reduce their shares, or whether the major shareholders want to reduce their shares, so the share price is fried high?
On the surface, the rise of Kunming Longjin Pharmaceutical Co.Ltd(002750) is due to the theme of traditional Chinese medicine, but the company’s performance can not support the rise of stock price. The company’s profit has fallen all the way from more than 90 million yuan in 2016 to a loss of more than 20 million yuan in 2019. Although the loss has been reversed in 2020, the deduction of non net profit is still a loss. In 2021, the profit in the first three quarters is only more than 6 million yuan, and the net profit after deduction is still negative. Therefore, it is said in this column that the performance of Kunming Longjin Pharmaceutical Co.Ltd(002750) can not support the existing high stock price. At the same time, the speculation of traditional Chinese medicine also shows the characteristics of plates. Therefore, it is not ruled out that it is the reduction plan formulated by the major shareholders and the second shareholders after seeing the high stock price, However, on January 13, the share price was still blocked on the trading board for some time, and the investors chasing the rise seemed too radical.
In this column, the reason for the rise in the share price of Kunming Longjin Pharmaceutical Co.Ltd(002750) should be attributed to theme speculation. At present, the dynamic P / E ratio of the company is more than 1000 times and the static P / E ratio is more than 700 times. It is understandable that major shareholders should reduce their holdings of such a share price level, but the key to the problem now is the investors still holding shares, Should we continue to expect the share price to reach a new high, or should a gentleman not stand under the dangerous wall?
Whether it is the market value management of major shareholders that drives the stock price up, or the major shareholders that stop the boiling of high stock prices, it is now certain that the major shareholders who know the most about listed companies have thought that the stock price is overvalued. At this time, it is no doubt that the risk of investors continuing to hold stocks is greater than the return. Therefore, in this column, investors should control the reduction risk first.
In fact, for the subject stocks repeatedly hyped by funds, including but not limited to traditional Chinese medicine, metauniverse and new energy, although they are promising sunrise industries, if the share price is too high and the increase is too large, there is also investment risk. If a company is really a major shareholder in the future, it will promote the stock price rise through market value management, and then launch the reduction plan at a high level, then the investors chasing the rise will become the target of harvest.
In fact, if investors want to avoid such investment risks, the best way is to adhere to value investment and do not chase high stocks. After all, more than 4000 listed companies do not have to compete with these few companies.
