The decline of wuxi, although mainly affected by the bearish impact, reminds us that we must always keep in mind the value of the stock. Last July, WuXi AppTec touched a 121-fold higher price-to-earnings quantile.

The decline of wuxi, although mainly affected by the bearish impact, reminds us that we must always keep in mind the value of the stock.

Last July, WuXi AppTec touched a 121-fold higher price-to-earnings quantile. Even if you are optimistic about the CXO track, don't forget that high stock prices need high growth to support, and if the operation cannot support high price-earnings ratios, the Davis double-click effect is sooner or later.

Therefore, whether it is for WuXi AppTec, or The Moutai and Ningde eras, stocks must be known: good companies must also have good prices. Any investment that only looks at the prospects of the enterprise and does not consider the price is easily affected by the bearish impact. Specially remind many fundamental-based value investment friends: do not bet on the game because of faith!

The current A-shares are not worth worrying about downside risks. But valuation factors must be carefully considered. In 2021, the disobedience of all kinds of high-quality stocks, forgetting the comparison between stock price and value, will doubt value investment, so as to feel very wronged: buying high-quality stocks loses money, but junk stocks are prevalent. But in fact, valuation correction never lets go of any stock, good companies will rise as long as the valuation is revised, and junk stocks are just a passing smoke cloud.

Therefore, based on the relationship between value and stock price, I continue to be optimistic about the valuation correction market of infrastructure, finance, and cycle this year!

The above information is for informational purposes only and does not constitute any investment advice. Investors make their own decisions and assume the trading risks themselves. Investment is risky, and you need to be cautious when entering the market.

Guolian Securities Co., Ltd

Investment Advisor: Ni Renyong

Investment advisory practice number: S0590620030009

Fund practice number: A20201019005554