This report is the second in a series of reports on the financial framework and stock selection model of Anxin strategy team based on the deconstruction of business model. Facing the financial data of the newly released 2021 annual report and 2022q1 quarterly report of current listed enterprises, we have conducted in-depth mining on the financial situation of small and medium-sized enterprises with market value, and updated the stock selection system and stock selection results for your reference.
According to the business model characteristics of small and medium-sized market capitalization companies, we have summarized three sets of targeted financial frameworks and stock selection models of "if you are the one" type of 0-5 billion, "growth and cash" type of 5-20 billion and "towards big white horse" type of 20-50 billion, actively explored the practical application of the cross check financial framework based on the deconstruction of business model, and tried to make use of the internal constraints of the framework and the cross check relationship between indicators, Get rid of the screening mode of simply increasing the absolute value of the index.
"If you are the one" model: for companies with a market value of 0-5 billion, it can also be expanded to 10 billion. The business model is a stock selection model with product competitiveness as the core and gross profit margin and its volatility as the starting point. For enterprises with a market value of less than 5 billion, excellent products are the best embodiment of sincerity. On this basis, through the secondary verification of the management's operating performance and shareholding confidence, potential stocks with gradually stable business model are selected. Core indicators: gross profit margin volatility + revenue / long-term capital + net asset growth; Auxiliary indicators: gross profit margin + time of listing and establishment + shareholding ratio of management.
The "cash in" model can be expanded to a market value of 30-20 billion. The business model is a stock selection model with profit cashing as the core and net profit growth as the starting point. For enterprises at this stage, their business model has been relatively fixed. Therefore, we hope to choose those enterprises that are in the growth trend, have controllable financial risks and maintain capital operation efficiency at the same time. Core indicators: net profit growth + revenue / long-term capital + monetary capital / interest bearing debt; Auxiliary indicators: Institutional shareholding ratio + absolute level of roe + asset specificity.
"Towards the big white horse" model: for companies with a market value of 20-50 billion, the business model takes steady growth as the core and roe stability as the starting point. In this high market value range, we hope to find enterprises that make progress while maintaining stability and gradually release the scale effect. Therefore, the selected enterprises need to have a stable rate of return and high gold content of net profit. Core indicators: roe stability + revenue / long-term capital + free cash flow / net profit; Auxiliary indicators: absolute level of roe + proportion of operating assets + cost rate. Risk warning: the model setting deviates from the actual situation.
Risk tips: the epidemic spread exceeds expectations, data statistical errors, large economic fluctuations, stock selection results do not constitute investment suggestions, etc.
