Sany's stock price, which works as "Mechanical Mao", began to fall from February 2021 to its highest price since its listing: 49.70 yuan. At 15:00 on March 15, Sany Heavy Industry reported 16.91 yuan, down 5.28%.
Why did Sany's stock price fall so sharply? Is it true that businesses don't make money? Obviously not, according to Sany Heavy Industry's third quarter 2021 financial report, during the reporting period, Sany's net profit attributable to shareholders of listed companies was 2.493 billion yuan, although it declined year-on-year, but the profit is still very impressive. The reasons for the decline in its stock price are diverse, but the plunge may have been double-killed by Davis.
The Davis double-kill effect refers to the double-digit effect between the relevant market expectations and the price fluctuations of listed companies. In market investment, the degree of correlation between price fluctuations and investors' expectations can basically reach 70%-80%. The rising expectations combined with the rising PE positioning level determine the non-linear correlation between the price and the investor's expectations.
Sany heavy work is a typical long-cycle stock, during the upward cycle, its stock price enjoys a high premium brought by the high prosperity of the industry, and when the industry cycle declines and the market prosperity declines, the expectations of investors also decline, and the stock price also changes.
From the PE (price-to-earnings ratio) level, in general, 14-20 is the normal level; 21-28 is the value is overvalued; 28+ means that the stock market has a speculative bubble, Sany Heavy Industry's stock price is the highest, its PE is 26, which proves that its value is already in an overvalued state at that time, coupled with the subsequent 2nd quarter and 3rd quarter of 2021 Sany profit fell by 28% and 35% year-on-year, which also led to the market's expectations for its reduction, and the stock price plummeted inevitably. Stocks that usually suffer from Davis's double kill will not fall less than 50%. At present, the total market value of Sany Heavy Industry is more than 140 billion yuan, which has fallen by about 60% compared with its highest value.
But then again, the rise and fall of stock prices is mainly a concern of the capital market, and Sany Heavy Work is a representative enterprise of China's construction machinery manufacturing industry, and product competitiveness is the most important factor that determines its development. At present, Sany excavators, pump trucks, crawler cranes and other products are well-known in the world, not long ago Sany also established a high machinery company, officially entered the field of high machinery, with the continuous improvement of Sany R & D level and the continuous accumulation of core technology, its development prospects are still very broad. In addition, Sany heavy work is a long-term cycle stock, after the end of the current round of industry downturn, I believe its stock price still has a large room for growth.