Alternative Investment Options In The Stock Market Crash

Drop in market

In addition to holding cash, there are several types of stocks that Chinese investors can consider. One is public stocks, the other two is high interest stocks.

In addition to these two categories, friends have recently mentioned another type of stock, which is about to be privatized.

I think of three, one is small fat sheep (0968), two is Huarun Microelectronics (0597), and three is Han Bo (0667).

There are three factors to consider when privatizing stocks: one is the odds, that is, the return; the two is the winning rate, that is, the success rate; the three is the time.

Among the three, the winning rate is the most difficult to quantify.

Success rate

Small sheep should be the highest. The reason is that the offer price is attractive, and the privatization price is relative to the profit of the company last year, and the P / E ratio is 30 times.

But the biggest uncertainty of small sheep comes from the part that the Ministry of Commerce and regulators can approve.

The risk of Huarun microelectronics and Han Yu Bo's acquisition is that the minority shareholders are not satisfied with the price.

In 2009, Huarun microelectronics was once privatized, priced at 0.3 yuan, when the number of minority shareholders opposed to privatization exceeded 10%, and ended in failure.

Although the price of 0.48 yuan is 60% higher than that at that time, it seems that the attractiveness of the company has increased greatly, but the management of the company has improved substantially.

The success rate of the company is much harder to guess, mainly because of the initial privatization of large shareholders.

The author thinks that the entanglement of the small shareholders is the price. They generally believe that the price is not attractive, but they fear that if the privatization fails, their stock prices will probably repeat the previous long slump, so that they do not know how many years to wait.