Chinese Price to Earnings Ratios; 5800 Times Earnings for Blankets, Only 275 Times For Internet Video

A random selection of company descriptions, with market cap and p/e ratios.

Market Cap $10B P/E 388.16
Yunnan Tourism Co., Ltd. is principally engaged in the tourist attractions business, real estate business, taxi and travel car business, conference hotel business, travel agency business, gardening and property business. In addition, it also involves in the wedding and conference business, and automotive repair business. The Company mainly operates its business in Yunnan province, China.

Market Cap $10B P/E 28,500.00
GUANGDONG ORIENT ZIRCONIC IND SCI & TECH CO., LTD. is principally engaged in the research, development, manufacture and distribution of zirconium products. The Company's major products include zirconium oxychloride, zirconium dioxide, zirconium silicate, compound zirconium dioxide, structural ceramics, zirconium sponge, nuclear grade zirconium and titanium sand, among others. Its products are applied in electronics, ceramics, glass, petrochemical, building materials, medicine, textile, aerospace, machinery and commodities industries. The Company distributes its products within domestic market and to overseas markets.

Market Cap $11B P/E 4,239.44
Guangxi Future Technology Co Ltd, formerly Guangxi Beisheng Pharmaceutical Co.,Ltd., is primarily engaged in the communications technology, information technology, computer, technology development of electronic technology, technical services, technical consulting, computer network engineering, computer hardware and software development, communications equipment, automation control system sales, design, installation and after-sales services.

Market Cap $8.5B P/E 5,891.46
HUBEI LANDING HOLDING CO.,LTD. is a China-based company principally engaged in the manufacture and distribution of textile products. The Company’s main products include blankets, woolen cloth, yarn-dyed fabrics, suits. It distributes its products in the domestic market and to overseas markets.

Market Cap $7B P/E 5,163.24
FUJIAN SNOWMAN CO., LTD. is principally engaged in the research, development, manufacture and sale of ice making products. The Company mainly provides ice making systems, flake ice machines, cold water machines, tube ice machines, freezers and other ice machines. It also involves in the sale and installation of central air conditioning systems. The Company distributes its products in domestic market and to overseas markets.

Market Cap $6B P/E 4,985.71
MINFENG SPECIAL PAPER CO., LTD. is principally engaged in the research, development, manufacture and distribution of specialty paper. The Company’s main products consist of cigarette paper series, industrial paper, tracing paper series and capacitor paper series, among others. The Company distributes its products in both domestic and overseas markets.

Market Cap $63B P/E 10,754.62
SEARAINBOW HOLDING CORP. is principally engaged in the pharmaceutical electron transaction business and pharmaceutical e-commerce business. The Company's pharmaceutical electron transaction and e-commerce businesses involve in drug, medical equipment and government procurement intermediary agent. The Company also operates medical welfare management business and property leasing business. The Company mainly operates its business in Hainan province and Beijing, China.

Market Cap $39B P/E 1,143.41
Faw Car Co., Ltd. is a China-based company principally engaged in the development, manufacture and sale of passenger cars. The Company provides its cars under the brand names of Besturn, Hongqi, Oley, Mazda and others. The Company operates its businesses mainly in eastern China, northern China, northeast China, southern China and other areas.

Market Cap $28B P/E 1,670.25
HUNAN DAKANG PASTURE FARMING CO.,LTD. is principally engaged in the breeding and distribution of pigs. The Company operates its businesses primarily through the breeding, production and distribution of pigs, piglets, fattening pigs and feedstuffs. The Company also provides slaughtered meat products. The Company distributes its products mainly in domestic market.

Market Cap $15B P/E 1,361.03
Nationz Technologies Inc. is principally engaged in design of integrated circuits (ICs). The Company operates its businesses through development and distribution of security chips, communication chips and solutions. It provides security chips, including universal serial bus (USB) key security chips, security storage chips, trusted computing chips, mobile payment chips and integrated solutions, as well as communication products, including communication interface chips and communication radio frequency chips. Its products are applied in fields such as electronic financing, electronic commerce, consuming application, communication system devices and wireless communication base stations, among others. The Company distributes its products in both domestic and overseas markets.

Market Cap $113B P/E 275.81
LESHI INTERNET INFORMATION & TECHNOLOGY CORP., BEI JING is a China-based company principally engaged in the Internet information service business. The Company provides online videos through Web browser, personal computer (PC) client-side, mobile client-side and television remote access. The Company is mainly involved in the provision of network video basic services and video platform value-added services. Its network video basic services include high-definition network video services, the distribution of online video copyright, and network ultra high definition display services; the video platform value-added services include video platform advertising and video platform distribution services, among others. On April 1, 2014, it acquired 100% stake in a Dongyang-based film company and 99.50% stake in a Tianjin-based media company. After that, the Company holds 100% stake in Dongyang-based film company and Tianjin-based media company.

Market Cap $143B P/E 153.81
SUNING COMMERCE GROUP CO., LTD. is engaged in the operation of franchised retail stores of household appliances in China. The Company mainly offers color televisions (TVs), audio and video (AV) players, disc players, refrigerators, washing machines, digital and information technology (IT) products, small household electrical appliances, air conditioners, telecommunications products and other products. The Company operates its business within domestic market and in overseas markets, including Hong Kong and Japan.

Market Cap $65B P/E 277.31
Wonders Information Co., Ltd. is a China-based company engaged in the provision of urban information software and services. The Company operates its businesses primarily through industry application software development, software and hardware system integration, as well as specialty information technology (IT) services. Its application software and services are applied in social security, health services, transportation, logistics, market regulation, environment and electronic government administration, among others. The Company operates its business within domestic market and to overseas markets.

Market Cap $111B P/E 345.06
AVIC Aircraft Co., Ltd. is a China-based company principally engaged in the production and sales of aircraft products. The Company's main businesses consist of aviation, transportation equipment and construction material businesses. The Company mainly offers aircrafts, spare parts for automobiles, decoration materials and aluminum alloy materials, among others. The Company distributes its products in domestic markets and to overseas markets.

Market Cap $119 B P/E 378.23
Sinopec Oilfield Service Corporation, formerly Sinopec Yizheng Chemical Fibre Company Limited, is principally engaged in the manufacture and distribution of fibers and raw materials for fibers. The Company's major products are polyester chips, bottle grade polyester chips, polyester staple fibers, polyester hollow fibers and polyester filaments, as well as purified terephthalic acid (PTA). The Company distributes its products within domestic market and to overseas markets. It also provides petroleum engineering technology service.

Market Cap $141B P/E 366.43
East Money Information Co., Ltd. is an operator of financial and economic information service platform. The Company is involved in the collection, integration and analysis of original information from data suppliers, as well as the provision of stock quotation, financial and economic information and data analysis services to terminal users through its financial data terminal platforms. The Company primarily offers paid financial data services, financial e-commerce services and Internet advertisement services through its Website Eastmoney (www.eastmoney.com). The Eastmoney Website provides financial information through several channels, including finance, stock, fund, financing, futures, bond, bank and insurance, among others.

For this last one, consider JRC Online (JRJC), which also sells financial information. This firm had $0.14 in earnings in the fourth quarter and is currently being sued by multiple law firms. JRJC has a market cap of $135 million, or a P/E of 43 based on Q4 earnings alone. If JRJC had East Money's P/E, it would be priced at $51.

QIHU Will Exit the U.S. Market

Barron's: Qihoo 360 Receives Buyout Offer: Who Are Next?

Search engine and security software provider Qihoo 360 (QIHU) received a buyout offer from its CEO Hongyi Zhou. The consortium led by Zhou is offering to buy out minority shareholders at $77.00 in cash per ADS. Qihoo closed at $66.05 yesterday, giving investors 16.6% premium.

...More than a dozen Chinese companies have received management-led buyout offers this year. But Qihoo is the biggest. It had $8.5 billion market cap as of yesterday’s close.

So who are next?

The list provided is good, but too short.

Foreigners Increasingly Bearish on A-Shares

iFeng: 外资看空观点层出不穷：A股暴涨是巨大意外 现在就跑路

Market cap to GDP

Market cap increase since 2008 (Top to bottom: Mainland, HK, USA, Japan)

Price-earnings ratio is far higher than other Asian markets. As of June 15, the Shanghai index is about 22 times current earnings, while just a few months ago, its earnings still hovering around 9.6 times, which is the lowest level at least since 1998. The Shenzhen Component Index is about 54 times earnings 4 times many emerging market index price-earnings ratio, price-earnings ratio for GEM is up to 128 times. Data show that as of the end of May 2015, Tokyo Stock Exchange GEM price-earnings ratio of 99, the HKEx Board trades at about 13 times earnings, GEM is 90.

...The profitability of listed companies fell slightly. The aforementioned "2015 Chinese Listed Companies in the market value of Management Performance Evaluation Report" clearly shows that, compared with the 2014 year, listed companies value creation index score has not only increased, even slightly. The report notes, suggesting that the listed companies in terms of the level and profitability as well as industrial upgrading and transformation, etc. There are many problems still need to make great efforts to improve.

...IPO queue high number next issue continues to accelerate. There are 25 IPOs this week, with 500+ companies in the queue.

...Foreign institutions bearish view after another: the bubble burst just a matter of time

With the A-share bolted all the way, the market value rising. Many foreign institutions began to express concerns. They believe that skyrocketing A shares is a huge accident, the market will eventually return to reason, the bubble burst just a matter of time.

Money Supply Rebounds in May

M2 money supply increase 2% in May alone, lifting the yoy growth to 10.6%.

Official Margin Debt Tops 350 Billion Yuan, Unofficially?

Bloomberg: China's $358 Billion in Margin Loans Points to Next Bear Market

Stock forecasters in search of an early-warning system for the next Chinese bear market are zeroing in on the country’s record $358 billion pile of margin debt.

When that three-year build-up of leveraged positions starts to unwind, regulators will struggle to limit the selloff, according to Bocom International Holdings Co. and Rabobank International. Almost all of this year’s biggest declines in the Shanghai Composite Index, including a 6.5 percent slump on May 28, were sparked by investor concerns over margin-trading restrictions. The securities regulator announced plans Friday to limit the amount brokerages can lend for stock trading.

“There’s definitely a ceiling on margin-lending,” said Wu Kan, a Shanghai-based fund manager at Dragon Life Insurance Co., which oversees about $3.3 billion. “Once leveraged investors begin to cut their holdings, it means they’ve turned cautious on the market and that will probably spark a correction.”

This is only the official margin ceiling, there's much more leverage in the system thanks to lending companies.

The tragic story in Margin Assisted Suicide; Changsha Man Jumps After Losing Everything is only an isolated case because it happened in the middle of a bull market. Mr. Hou of Changsha was very unlucky. He bet everything on one stock, with 4 times leverage, and that happened to be one of the very few stocks to drop limit down for two consecutive days, wiping out all of his capital.

Even though China Tightens Margin Financing Rules and

China Securities Regulatory Commission said investors need to have a minimum daily balance of 500,000 yuan ($80,000) securities assets in the last 20 trading days to take margin loans.

small investors are still going to find credit if they want it, leveraging up with outside credit to hit the minimum balance and then layering margin debt on top of it.

This sign says:

Give You Lots More Stock Trading Capital
Gives You Lots More Profit Opportunity

You Trade Stocks, I Give You Money, Profit Is Yours

Also Provide Capital For Overseas Futures and H-Shares

Expand Your Capital 1 to 10 Times; Professional Service

Three Signs The A-Shares Market May Be Headed For A Correction

This article was a top headline in the finance section. It lists three reasons selling pressure may be building.

iFeng: 三大特征暗示主力或有杀跌动作

1. Limit up stocks are falling in number, limit down stocks are rising in number.

According to the article, limit ups were down to 119 on Monday and limit downs were 17.

2. Volume is falling.

The article says there's bifurcation among blue chips, but as the chart below shows, there's no divergence yet between volume and the Shanghai Composite. There have been some strong pullbacks though, such as CRRC slipping 10% on Tuesday.

3. Technical indicators on the GEM Index have turned, with the MACD turning lower. See below.

Although the monthly shows no turn lower.

China Asset Management Association Says Stop Speculating In Stocks

China's fund association cautions mutual funds against speculative trading

China's asset management association is calling on mutual fund managers to refrain from speculative trading, highlighting growing concerns of a bubble in China's gravity-defying stock market rally. "Capital markets are significant to China's economic restructuring, but a market's boom and bust would have a negative impact on economic stability," the Asset Management Association of China said in a letter posted on the website, dated June 5.

Margin Harder To Obtain

Caixin: Stock Investors Have a Harder Time Getting Money for Leveraged Buys

Financial institutions have become more cautious about lending money to investors playing the A-share market, which is seeing its strongest rally in nearly eight years even as analysts issue warnings of a collapse.

Several sources at securities firms, trust companies and asset management firms – the primary sources of capital for leveraged trading – say they have tightened their requirements for borrowing and lowered the amounts investors can get, even though demand is still strong.

Securities firms lend to investors mainly through margin trading and short-selling, but only about 8 billion yuan out of more than 2 trillion yuan worth of outstanding investments are stocks being shorted.

The growth of margin trading and short-selling has slowed recently. From March 5 to April 16, the weekly growth rates of margin trading and short-selling were mostly around 6 percent to 7 percent. From April 23 to June 4, the rates slowed to 1.4 to 5.1 percent.

Although there was a short-term change in the pace of the stock market advance in late April, stocks haven't suffered yet for the lack of margin growth.

Another Chinese Firm Exits the U.S. Stock Market

Caixin: Third Chinese Company Announces Plans to Leave NY Stock Market

Another Chinese company listed in New York says it is seeking to go private, following similar announcements by two other firms.

Mindray Medical International Ltd., a leading medical device and solutions provider, said on June 4 that its board received a proposal from three executives to take it private by offering investors US$ 30 per share. The price is a 9.2 percent premium on the June 3 closing price of US$ 27.47.

...One Mindray shareholder said the company has tried to keep its share price low by reporting poor performance, a move that would allow its executives to offer investors less to go private. Its first-quarter report said that revenue rose 2.9 percent compared with the same period last year, but net profits fell 14 percent. The shareholder said he was not satisfied with the offer from the team of executives and would keep the shares.

Zhang said it was likely the executives could complete the privatization, and if common shareholders did not sell before the company left the bourse, they would lose money by holding shares of a non-listed firm.

If You Really Want to Gamble, Head Over to the Third Board

China's third board is the future of stock markets. It allows investors and entrepreneurs to connect directly, with easier listing requirements.

China Daily: New Third Board not the Nasdaq of China, says official

It would be inaccurate to compare China's New Third Board, the pilot national share transfer system for small and medium-sized enterprises, with the Nasdaq Stock Market in the United States, Yeeli Hua Zheng, chief representative of the US stock exchange in China, said on Monday.

The National Equities Exchange and Quotations, better known as the New Third Board in China, is a unique and innovative mechanism of the capital market and no bourses in the world can be compared to it, Zheng said at a news conference in Beijing.

The response from Nasdaq's China chief was intended to clarify market confusion about the Chinese board, as it has been increasingly referred to as the Chinese version of Nasdaq by some press and market observers.

Zheng said that the listing standards and the fundraising mechanisms of the two bourses are totally different.

"Comparing the New Third Board with Nasdaq would be ignoring the innovative characteristics of the pilot board in China," she said.

...Since it was launched in 2012, the board has developed into an open fundraising platform for small unlisted companies in China as part of the country's effort to develop a multi-layered capital market.

Shares of more than 2,000 companies are traded on the board through agreement or market making with total capitalization exceeding 1.2 trillion yuan ($190 billion).

SCMP: China’s Third Board market a nursery and laboratory for start-ups, but investors beware

Fund managers and investment bankers did not pay much attention to the Third Board until Chinese Premier Li Keqiang visited in December and showed his support to the market. The Third Board has since become more active.

As of May 28, there are 2,481 companies listed and many believe the total would hit 3,000 by the end of the year, higher than the stock exchanges of Shanghai and Shenzhen. But turnover on that day was only 530 million yuan, compared to the 2.4 trillion yuan turnover in Shanghai and Shenzhen on the same day.

In term of volatility, Third Board stocks are not capped by daily trading limits as they do in Shanghai or Shenzhen, where shares face a 10 per cent daily limit move. Wild price swings are the norm.

“As the Third Board market is still at an early stage of its development and is new to China’s investment community, the recent volatility is not unexpected,” said Edmond Chan, co-head of capital markets services of PwC Hong Kong.

“The Third Board widens financing channels and provides funding for corporations in China. It serves as a platform to connect wealthy individuals and institutions with companies such as start-ups and high tech companies that require capital to convert their business model into a profit generating business,” he said.

Wusi recently listed a subsidiary on the Third Board: WuXi PharmaTech Lists Shares of Small-Molecule Manufacturing Subsidiary STA on New Third Board in China. There is an offer to take WuXi private and some believe the company would then relist on the A-share market.

One problem with the new board is the ease of listing: although 2500 companies are listed on the exchange, about 200 firms dominate trading. The result is many firms are still looking at other options, such as using reverse listings in Hong Kong.

经济观察： 到港股买壳去

Since last year, many domestic real estate companies backdoor backdoor to Hong Kong, resulting in relatively high-profile main housing, housing prices pushed higher. Mainland shares that would have been dead in the water because of the rise of the market three new board, gradually swelled, prompting some otherwise made up his mind to go to Hong Kong-listed company moved reflux heart. Wu had a friend over, make photovoltaic power plant project, too expensive in Hong Kong, back to the new board to spend more than ten million to buy a shell.

However, the number of new board listed companies at present, although historically close to 2500, but the city can do less than 200 transactions.

作为上海一家PE机构合伙人的吴志超最近接到了很多公司到香港上市融资的咨询。吴原本从事境内的并购融资业务，但由于此前曾帮境内项目公司到香港借壳上市的经历，不少有同样融资需求的企业现在纷纷找上门要求指点迷津。“一个星期两三单。”他表示。

最新一例是一家深圳的纯贸易公司，去香港上市融资的意愿特别强烈，原因很简单：又快又便宜。

在A股市场上纯贸易类的公司特别少，比如福建厦门的建发国际，因为外界认为贸易行业利润低，再加上这两年大环境不好，做进出口贸易的生意都比较清淡，在目前注册制靴子仍未落地的情况下想要在境内上市显然不知猴年马月。“而在市场化程度较高的香港，如果只是买壳，拿到上市公司控股权，到交割完毕半年就可以搞定。”在吴志超看来，即便将来实施注册制，没有行政管控的香港依然比A股具有吸引力。因为他认为，注册制只不过是将审核主体从证监会转到交易所，上市周期可能仍要两到三年，并不会缩短。

壳费也是境内公司考量上市地点的主要因素。尽管随着去年下半年以来借壳案例的增多，港股市场壳费有水涨船高的迹象，但总体变化不大，依然在2亿到5亿港元之间。但A股市场的的价格则普遍高出很多。

其实买壳卖壳在香港股市是一门古老的技艺，历来司空见惯，江湖上所谓“陈壳王”、“詹壳王”等的事迹亘古流传。而在香港借壳后能马上发债或者增发新股，迅速为企业融资打开方便之门，进行新一轮的并购扩张。

。。。。。。去年以来，不少境内地产公司去香港买壳借壳，导致壳主比较高调，壳价被炒高。而本来一潭死水的内地新股市场因为有了新三板的崛起，逐渐热闹起来，惹得一些本来打定主意要去香港上市的公司动了回流的心。吴志超就有个朋友，做光伏电站项目的，嫌香港贵，回到新三板花一千多万买了个壳。

不过，新三板挂牌企业数量目前虽历史性地逼近2500家，但其中能做市交易的不足200。

众所周知，券商是新三板高潮的幕后推手，在挂牌这个环节，它们能赚的费用也就170万到180万元人民币之间，只做这个环节，显然吃不饱。如果本身没有好的概念和业绩让券商在做市的时候再赚一把，券商是很难有动力帮企业做市的。再加上新三板上都是机构投资者，不易被忽悠，以至于很多公司交易量很小，而没有交易就融不到钱，融不到钱就没有办法再去投资并购把企业做大，向中小板冲刺。这意味着去香港对很多公司而言仍然具有吸引力。

Focus Media Returns, On Shenzhen Exchange

Caixin: Digital Ad Firm to List in Shenzhen Two Years after Leaving Nasdaq

A large digital advertising company is about to relist on a stock exchange in Shenzhen through a deal that valued it at twice the amount investors paid to take it off the Nasdaq two years ago.

Shanghai-based advertising giant Focus Media Holdings will go public on Shenzhen's stock exchange through a backdoor listing, which will see it sell all of its shares to synthetic rubber maker Jiangsu Hongda New Materials for 45.7 billion yuan, Hongda said on June 2.

If the deal goes through, it would be the first time a Chinese company left a U.S. bourse, then listed on the A-share market. In 2013, a buyout group consisting of Focus' management and private equity investors including the Carlyle Group took the firm private through a deal that valued it at US$ 3.7 billion, or about 23 billion yuan.

Hongda said it will pay for the transaction using a mix of cash, shares and other assets. Trading of its shares has been suspended since December over a proposed restructuring in which it did not mention Focus. The suspension continues as the planned acquisition awaits approval from shareholders and the country's securities regulator.

The deal would make Focus' chairman, Jiang Nanchun, also known as Jason Jiang, the biggest shareholder of Hongda, with a one-quarter stake.

Xin Yuesheng, managing director of Citic Capital, which partly owns Focus, said the mainland's stock market was picked over the one in Hong Kong out of consideration for the firm's development.

"The valuation of companies on the A-share market still tends to be better," he said. "Focus is a Chinese company and its clients are in China. Listing domestically will allow for better interactions with clients in performance and branding."

Focus was cheap when it left the market and even at the new IPO price, assuming the numbers are good, the stock is not expensive by U.S. standards, let alone A-share market standards.

The firm's agreement with Hongda says it operating net profit from this year to 2017 should be no less than 3 billion, 3.4 billion and 3.9 billion yuan.

This statement is worrisome though:

He said Focus was much more valuable than 45.7 billion yuan because "every year its cash flows can reach at least 3 billion yuan, and it can borrow at least 10 to 20 billion yuan from banks for purchase, expansion and investment."

At least it'll be fun on the way up.

New Stock Accounts Hit Another Record High

Regulators Already Losing Control As Policy Easing Sparks Speculative Fever in Housing; Retail Investors Anxious After 528 Crash

Shenzhen is on the far left.

In China, Shenzhen real estate is rebounding from long slump

A rainstorm that flooded roads in Shenzhen last Saturday did not stop some 4,000 people from lining up in front of the sales office of a residential community in Longhua District that had just started taking orders.

The buyers snapped up more than 700 apartments — the most expensive ones cost more than 40,000 yuan ($6,500) per square meter — in less than two hours, the developer said.

A similar scene occurred at six other developments that also opened for business over the weekend, underscoring the strength of the rebound seen in the southern city’s housing market since the central government relaxed property-related policies in September and again in March.

In recent months, the prices for new apartments in Longhua District — near Hong Kong and home to many IT companies — have soared from around 28,000 yuan to about 40,000 yuan per square meter, analysts familiar with the Shenzhen market said.

The market for second-hand apartments has also recovered.

The headline of this article in iFeng describes a situation where buyers bought 1,600 apartments in 4 hours for a total of 8 billion yuan.

iFeng: 楼市上演“抢房大战” 1600套房4小时抢光

This has led regulators to announce buying restrictions will remain in effect and these sell-out situations will be strictly investigated.

iFeng: 深圳楼市疯狂引官方发话：继续限购 严查"日光盘"

And as for the talk in recent days about the "out of control" Shenzhen property market, Shenzhen official said these were not objective, the official said to the excessive growth of house prices should not be exaggerated, it should be rational and proper guidance to buyers. In addition, Shenzhen will launch a series of measures to ensure the healthy and orderly development of the property market, including speeding up the sale of commodity housing approvals, accelerate new residential land supply. Fake "one day sell-outs" and other artifically exacerbated tight supply and demand "cover plate reluctant sellers" and other illegal activities, will be strictly investigated and dealt with according to law.

In the stock market, the regulators are silent as investor anxiety soars: 证监会对暴跌沉默意味深长 股民周末心发慌

"Thursday's crash, from the daily limit to the lower limit; rebounded on Friday, and from limit to limit, such heartbeatin stock market, how to play next week, how should I do??" After Thursday's terror after the collapse, and Friday no rebound, just received a puzzling the "doji" and SFC afternoon press conference, did not have any say on the stock market slump, which makes many investors expect policy to save the city more flustered.

Although 5000 is not a bull market top is industry consensus, but we are also cautious on the stock market next week that 5000 will be around for some time to adjust up and down or fluctuated.

...After the crash, most of the new investors suddenly gone spectrum, many investors are concerned about a regular meeting on Friday, regulators will not be so, for A shares what kind of argument or position as before. However, the Commission conference on Friday, the management did not issue any sound on the stock market plummeted.

Many investors worry 5.30 massacre reproduce, in fact 5.30 Incident Management is a sudden increase in the results of the stamp duty; and the recent market crash, is to adjust to market demand more spontaneous. "Since they do not want regulator comments to lead to a collapse, do not expect regulators to say anything to save the market." Guangzhou Securities in a market source said, management wants the stock market to go "Manniu" way, as long as the stock market does not appear irrational continuous spike , regulators "invisible hand" will not appear, this is the stock market a sign of maturity.

Aunty Zhao, who had experience in the 2007 crash, cut her positions in half.

The old shareholders Zhao aunt experienced in the 2007 bull market slump. "Slump 5.30 is very horror, many stocks plunged 40% in a short time." Last week coincides with the eighth anniversary of the massacre 5.30, as investors worried about the policy side appears heavy bearish again.

Zhao aunt told reporters that not only is she a lot of experienced last round of the long bear market of 5000 in the vicinity of the old shareholders have to lighten up plans. She also made full preparations, after a sharp correction on the stock market if touched 5000 points, then halve the warehouse is undoubtedly the best choice to reduce the loss. If singing all the way to seven or eight thousand points, and even break a million points, the remaining half position can guarantee themselves a share in a bull market.

Other investors are all in:

Reporters learned that many new investors are approaching 5000 points chase at the high bid, the result is "set" to live. Chen told reporters that the new investors, last week saw the market impact of 5000 points, he is extremely excited to buy what stock analysts friends advice, a friend suggested that he was not chasing the high, be careful near the 5000 shock, but he did not hold back, High chase into a small board stocks. When a friend asked him to dare to bargain-hunting after the crash, he only reluctantly said: "I have been chasing the high, all in."

The Economic Observer also looks at the stock market in “530”魔咒之后，成长股继续“牛”？

A shares do not believe in Murphy's Law

If you are worried about something happening, then it is more likely to occur, which is a classic description of the fourth article of Murphy's Law.

A share of the market has once again proven the existence of Murphy's Law. However, it seems not at all.

From entering since May, the market has experienced a few days after the opening of a new round sideways style sharp short squeeze - price, K line graph upside trend is exactly the same and the great bull market in 2007, at the 18th to the 27th, to achieve the "Eighth Yang" of the market will push the index to 4941.71 points.

However, the rapid climb in the index during those few days, the last round of experienced investors began to worry CBBC conversion occurs when the cliff is not the type to fall "530" price.

In this backdrop, May 28, 5000 stock index mark in one go after failing to turn upside down, again and again 4900,4800,4700 break point three integer mark, and eventually huge decline of 6.5% to close, resulting in two City, more than 500 stocks hit bottom, over 2000 stocks pan-green "grand."

On that day, except under "530 Quotes" Fear in the background, the national team "Huijin" holdings of the four lines, profit-taking, brokers tighten financing and IPO soon lever multiple factors such as the market is also thought to cause big day an important reason for fall. "530 Quotes" The reason why people fear, in addition to the Ministry of Finance midnight stamp duty to raise significant policy bearish stock market brings, but also because "530" style cliff fall is the end of the bull market preview. In this round of market, the "528" crash appears therefore cause for concern.

Eight years of a reincarnation. "528" after the crash, is not it will continue the trend of "530" after the? Or yet, this bull market will be any different? After "530", A shares where to go?

A discussion of various brokerage and investment bank outlooks follows:

After the "528" of adjustment, market focus extends bull next step to become a topic of concern investors most.

Southern Fund believes that despite some adjustments in the profit-taking pressure, but adjust the depth is limited, the same medium-term bull market, this view has been recognized by most analysts profession.

Founder Securities chief strategist 郭艳红 for Economic Observer said that after the implementation of the New Deal, Jiangsu Province, the local government debt, to generate a reference to other provinces, after the local debt default risk is reduced, the safety factor of the stock market can be improved; the same time, the management of the continued to accelerate reform of propulsion for the economic transformation provides a good expectation in the market continue to loose liquidity environment, which may be more long-term bull market.

But, as in the first half as the sustained and rapid rise in A-cap stocks, perhaps hard to see in the second half, a private person, said Beijing, a new feature of this bull market is constantly leveraged funds into the market, the market share of leveraged funds The rise is a direct result of the market volatility zoom, and even a market correction could lead to great fluctuations in the disk management precisely for this reason, the ongoing control lever, when the lever is controlled in a certain range. " fast ox "may turn regulators hope" Manniu. "

Currently, in terms of margin financing various indicators continued to climb, as of May 28, two financial balance once again set to reach 208 million yuan, of which, financing the balance has steadily maintained at 2 trillion or more, reaching 207 million yuan. At the same time, the ratio of the two financial transactions in shares traded in the A has maintained a high proportion of margin according to Company data show that as of the end of April, two financial transactions accounted for 17.1% compared to A-share trading.

Even in the May 28, the broader market plunged 6.5%, the funds financing the purchase amount is also once again hit a record high, reaching a high level of 2,691.39 billion yuan, buy only the amount of turnover accounted for 11.40 percent of the day. After Based on this, the purpose of the regulation of securities firms began to risk, in early May, 1352, China Merchants Securities lowered the discount rate securities, Hai Tong Securities May 26 Kusakabe issued a notice to all credit customer financing (vouchers) margin percentage increase of 5 percentage points again . On the same day, GF Securities also announced that in order to control the risk of margin trading business, from May 26 onwards, the financing margin ratio margin trading on the underlying securities from 0.7 to 0.75.

Meanwhile, with the regulators on OTC with a capital "forbidden umbrella", clean up after docking HOMS brokerage and other movements, off with the capital by a certain degree of containment, with Chinese companies and P2P platform is overall contraction direct docking with the capital broker business.

Based on these actions, the above-mentioned private placement to judge the second half of leveraged capital inflows may slow down the speed, enthusiasm after trading stabilized in the second half of the investment style will change accordingly.

On the theme, Minsheng Securities and Founder Securities are focused to the SOE reform. Minsheng Securities believes that the bull's largest regional theme - owned enterprise reform, real good yet fully Priced-In, has a real future potential of the pillar industries has not yet been fully excavated, the rise of direct financing market is still halfway through the second half with two intensive policy focus on catalysis 2025 is the Chinese main large manufacturing and state-owned enterprises. Founder Securities also believes in the second half, promoting SOE reform and perhaps even faster than we expected, after the formation of the top-level design, 1 + N SOE reform policy to accelerate the floor, around the local policies will be introduced intensive, including the reform of central enterprises, ESOP and the establishment of asset management platform, will bring good investment opportunities in the second half.

However, investment style, due to the different emphases of brokerage, distinct differences appeared in the restructuring of short-term strategy in the second half.

Among them, Huatai Securities and Gao Yi assets and other agencies believe that a clear opportunity in the second half of the industry structure and broad demand for space-financial assets. Huatai Securities analyst Luo Yi that the recent inventory shot regulators leverage, although good liquidity in financial stocks may be subject to the impact of the first round, but regulators are focusing on inventory objects are 1: 3 or more highly leveraged illegal market funds, and small, high interest rates do not meet the regulatory standards of these accounts financing, financing channels corresponding to these companies is much higher valuations, purely storytelling company. So, after this round of adjustment, the financial sector will have a very significant excess returns in the second half, the proposed allocation of financial stocks.

Guoxin Securities and Guotai Junan view the opposite happens. Guoxin Securities A shares from 5.30 after the departure angle fix proposed Hengqiang effect that when the resource class and now GEM can be compared, it is recommended after the crash should continue to focus on growth stocks configuration represents the new economy.

Guotai Junan Securities chief strategist Joe never hold "do not have a fear of heights, continue to favor growth" view that the "increase in risk appetite is the fundamental driving force of the bull market in 2015", "Before the macroeconomic environment has fundamentally changed the market in the short term does not style change will occur "in the third quarter suggest that investors still continue to configure the growth of the company and restructuring the company along traditional policy direction.

Investment sector, "may wish to focus industrial upgrading, such as 2025 in China, including robotics, high-end CNC machine tools; focus on emerging consumer formats, such as new energy vehicles, intelligent logistics, intelligent home, electricity providers, industrial parks and venture capital; Internet transformation traditional industries, such as agriculture, medicine and other. "Li Shaojun said.

Chinese Netizens React to Market Drop

This comes from friends on WeChat. Chinese reactions to the drop in stocks. Some people are levered up, so the 6.5% drop led to some hefty losses.
【不服不行】8年前惨剧今日重演！朋友圈一片哀嚎，天台站满人！

First the comparison to May 30, 2007:

This led to contemplating a jump:

Followed by: Don't jump! Wait for the rebound!

Don't fear, it's only a technical adjustment!

May Crash Fear Returns After Thursday Drop Matches 530 Plunge; Baofeng Avoids Limit Down Loss

I had a feeling the A-share market had to be peaking, at least in the short-run, when people who don't know the difference between an A-share, an H-share and a time share started asking me if ASHR was a good buy.

Coverage of the market's 6.5% plunge on Thursday included this nugget:

History is always surprisingly similar, on May 30, the stock index also plunged 6.5%.

iFeng: 沪指暴跌6.5%祭奠530 五百股跌停

I posted on this at the start of May: Will Chinese Stocks Crash in May?

A 6.5% drop on May 30, 2007 was the first move of a 5-day sell-off that shaved 23% off the index.

Recently, there's evidence that QFII's are again lightening up on Chinese shares, selling down positions as the price rapidly increases. This has at least one person drawing a parallel to the past. In terms of psychology, it is an apt comparison. The Chinese stock market is driven by emotion and psychology, and at some point there will be a terrific correction that will have some explanation, but will mainly be a psychological reaction. This bull market has yet to see a significant correction and the current percentage gains from the ongoing rally have exceeded the gains from 2006-2007. A correction of more than 20 percent is possible.

Looking ahead, if there is a 20% correction here, then the next parallel that will be brought up is the October 2007 market top.

And in case you're wondering about Baofeng, there were more than 500 stocks limit down on Thursday, but Baofeng wasn't one of them. It fell 9.41%.

A-Share Insider Sales Up 500% Over 2014

According to the 21st Century Business Herald reporter, incomplete statistics show that through April 30, 2015, a total of 817 shareholders in Shanghai and Shenzhen companies reduced their holdings, net sales reached 219.8 billion yuan, a year earlier the total was only 40.1 billion yuan. From January to April this year, the net reduction each month was 43.4 billion yuan, 34 billion yuan, 64.4 billion yuan and 78 billion yuan.

The 5 companies seeing the heaviest selling were Sinoer Men's Wear (002485); Wenfeng Great World Chain Development (601010); Spring Airlines (601021); Western Gold (601069); and Zhongnan Heavy Industry (002445). The controlling shareholders of Sinoer reduced their holdings by 32.94%, the most in 2015. Going back a little farther to the end of 2014, Wenfeng insiders have reduced their stake from 75.72% to 20.90%.

iFeng: 近1个月4只股成减持集中营 5只股遭机构大幅减持

Monday A-Share Stats

Some stats from Monday's post-PBOC 3% rally in the Shanghai Composite.

229 stocks were limit up 10%.

The worst performing stock was Zhejiang Yongtai Technology (002326). It plunged an incredible 2.70%. Only 10 other shares were down on the day. Out of 2651 stocks.

Bull on.

Related: Chinese shares are looking decidedly frothy

The bubbles are particularly extreme in Shenzhen, and in technology: the median tech stock traded in the city is priced at 65 times forward earnings (the median Nasdaq tech stock is at 19 times). There are exceptions. Banks, which make up more of the Shanghai market, are still priced for bad news. Still, Longview Economics calculates that large state-owned enterprises have performed very similarly to large completely private companies in the CSI 300 index over the past year.

Xinhua Panics In Order to Prevent Panic

Yesterday, a headline article at iFeng discussed a possible crash in May and right on cue, stocks dropped.

Today, Xinhua News published four articles today telling investors not to panic and to BTFD. Bloomberg covered it in a short video (see below).

Article 1: China's Slow Bull 常规降温遭过度解读 A股将慢牛

Over 1000 stocks fell more than 4% on Monday, but 71 were still limit up (including "old faithful" Baofeng), same as before. No worries!

People are talking about the end of bull market or a intermediate-term peak and information about rising risk is coming in thick, but market history is full of collapses after a big run up.

BTFD.

Article 2: Investors Adopt Wait and See Attitude As Market Adjustment Pressure Accumulates 市场调整压力逐步累积 投资者观望情绪渐浓

Due to IPOs and negative factors, the stock market dropped.

As the market sharply higher, the market adjustment pressures gradually accumulated more and more investors tend to lighten up on the sidelines.

According to a survey report financial intelligence rating on the 5th released, in May 2015 China A-share hedge fund managers confidence index was 91.30, last month dropped 7.61 percentage points, this is the index for two consecutive months low at the critical point. Data show that private equity fund managers in May A-cap stocks pessimistic, more and more private equity tend to lighten up.

...Looking ahead, Yang Delong, who believe that, despite the adjustment in May highlighted the pressure, but in the medium term, the bull market pattern has not changed.

BTFD.

Article 3: Why did the market slump? 沪深股市缘何大幅下挫？

On a deeper level, the Shanghai Composite Index doubled in less than a year, more than half of the shares traded at more than 100 times earnings, a number of sectors have a local bubble. In addition, margin the balance of the two markets to break 1.7 trillion yuan, far exceeding one trillion yuan at the beginning of this year, a lot of leveraged funds market increases the volatility of the stock market.

...Respondents believe that the stock market volatility adjustment, investors should be rational treatment market, digging a reasonable valuation, promising listed companies, do not blindly chasing hot stocks not to borrow money, we must do risk prevention.

Dial it back on the margin, this isn't Macau.

Article 4: This Crash Is A Baptism, After the Rain is a Rainbow 股市遭遇重创不失为一场洗礼 风雨过后更见彩虹

The headline is BTFD, but in what can only be described as a seriously wrong turn, the article asks readers to channel their inner Hamlet.

Everyone's heart has a Hamlet, how to view the stock market?

“Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.”
“Though this be madness, yet there is method in't.”
“Conscience doth make cowards of us all.”
“When sorrows come, they come not single spies. But in battalions!”
“Something is rotten in the state of Denmark.”

After all, a collapse is the baptism of new investors, it will continue tomorrow, after the storms the market will be an even more beautiful rainbow. "Pigs do not continue to fly," value investing has no borders, rational investment should become the consensus of investors.

Sell your pigs now!

Bloomberg's coverage:



Yesterday's drop may have broken Baofeng: shares opened the day lower and are now up only 5%.

Update 5 minutes later: Baofeng is limit up again. It may yet hit 900,000 and go on to destroy the Kodan armada.
Update: Baofeng couldn't hold its gains. It finished the day up 5.89%. The streak is over at 28 days.

Caixin Unloads on the Bull Market

History has shown that any attempt to control the stock market can be futile and dangerous. Blind approval of the current rally will only create a mad bull and only worsen deep-rooted conflicts. Regulators should remind investors of the risks rather than trying to rein in the market. The number of stock trading accounts in the first quarter surged by 433 per cent to more than 7.95 million, and most are held by novice investors. More importantly, the massive funds in the market have yet to be put to a stress test. A sudden correction could lead to chaos. Regulators should closely monitor the risks and crack down on illegal activities such as insider trading, information disclosure fraud and market manipulation.

Any hopes that the stock market can boost the economy fail to understand the relationship between the two. Only unwavering reforms can produce a healthy stock market that will help the real economy.

Caixin: Notion that Stock Market Can Boost Economy Is Misguided

New Accounts Surge Ahead of May Day Holiday