The 170 billion big white horse flash crash 7%, the blizzard is coming!

Today's stock market is really bloody. The Shanghai Composite Index fell below 2,900 points by 2 points. More than 4,000 stocks fell in the market. But my own account is red, and it's hitting a new high.

This fully fulfills the previous judgment of the Heart of the Rock, "The Stock Market Monopolizes All Kinds ......of Disobedience": the fundamentals of the stock market are undergoing major changes. Light the market, heavy stocks, in order to avoid the disaster!

Gree plummeted 7%, what happened?

Today's widely discussed in the market is the white horse stock - Gree Electric plummeted 7%. Gree Electric Appliances, once a long-term bull stock in the A-share market, is also loved by many "value investors" because it has higher dividends than Haier Smart Home and Midea Group.

The most direct reason is that on the evening of December 19, Gree announced that it would increase its holdings in Gree Titanium New Energy Co., Ltd., and became the controlling shareholder of the company after the increase, holding 72.47% of the shares.

"Gree Titanium" is actually the previous Zhuhai Yinlong. After the announcement of this transaction, Gree's share price fell, indicating that investors did not approve of the transaction. It's simple:

First of all, Gree and Dong Mingzhu personally invested in Zhuhai Yinlong, resulting in huge losses. In 2021, Gree spent 1.8 billion yuan to win 30% of Gree Titanium's shares, and now the company's net assets are only 66 million yuan. Gree lost almost all of its investment in this deal. Dong Mingzhu invested 2.34 billion yuan by himself, and now there is only more than 10 million left, and he is almost lost.

Now Gree is going to spend 1 billion yuan to increase its holdings of "Gree Titanium", and Gree's shareholders will vote directly with their feet.

Secondly, it is difficult for "Gree Titanium" to continue to act in the field of new energy. The predecessor of Gree Titanium, "Zhuhai Yinlong", was the first to step into the field of new energy batteries like CATL, but it bet on lithium titanate batteries, and later ternary lithium batteries and lithium iron phosphate were used on a large scale in the market.

Bet on the wrong technical direction led to the company's continuous losses, and CATL became "Ningwang" after its listing.

At present, the growth of the new energy vehicle market is slowing down, and even the growth rate of CATL is decreasing. Moreover, the competition in the entire battery market is very fierce, and price wars are frequent. Gree invested another 1 billion yuan in Gree Titanium, which made shareholders really can't understand what medicine Dong Mingzhu's gourd sells.

Therefore, as soon as the news of increasing the holdings of Gree Titanium came out, Gree Electric Appliances plummeted by 7%.

Gree's future is worrying!

At present, the price-earnings ratio of Gree Electric is only 6 times, which is much lower than that of Haier Smart Home and Midea Group, which shows that the market has a very low valuation for Gree.

The reason for the very low valuation is that Dong Mingzhu has been in charge of Gree for more than 10 years, Gree has not achieved diversification and globalization, and most of its revenue has come from the domestic air conditioning business, and overseas sales account for no more than 20%. The overseas revenue of peers has long exceeded 50%.

Gree's growth has been seriously bottlenecked. What's even more terrifying is that Dong Mingzhu failed to invest in mobile phones, lost money in new energy, and threw a lot of money. At present, Hillhouse Capital has invested in Gree Electric Appliances, and the book loss has exceeded 10 billion yuan. Other small shareholders, it is estimated that no one makes money.

Dong Mingzhu, who is about to be 70 years old, has no successor plan so far, nor does he have a clear plan for Gree's diversification and globalization. This makes Gree's prospects even more bleak.

In a word, the fundamentals of Gree Electric are getting worse, and indiscriminate investment will accelerate the deterioration of its fundamentals.

The continuous decline of A-shares is a normal phenomenon!

A leopard can be seen in the tube. Gree is just a microcosm of thousands of stocks in the A-share market. Why did A-shares continue to fall when the stock markets of almost all countries, including Dow Jones, Nikkei, Mumbai and Germany, have been independent of the world?

Some people say that this is because the total market value of A-shares is 80 trillion yuan, which is only 1/5 of the US stocks, but the amount of financing accounts for 50% of the world. U.S. stocks account for only 10% of the fundraising. This shows that the main purpose of the A-share market is to raise funds for enterprises, and enterprises can use various means such as listing, securities lending and refinancing, and additional issuance to cut leeks, and shareholders enter the market to send money.

Of course, the flaws and unfairness of the rules of A-shares are undeniable. However, more importantly, among the A-share listed companies, there are a large number of companies similar to Gree Electric Appliances, and the continuous number of new listed companies are listed for the purpose of listing to make money.

As a result, the stocks that the entire market previously thought could be "pensioned" are facing a similar dilemma to Gree: growth has hit a ceiling and there is no global operating ability.

When it comes to the root cause, it is because China has experienced more than 20 years of rapid development, with an urbanization rate of nearly 70%, a declining population, a continuous decrease in newborns, a real estate recession, and an aging population, which has directly completely changed the fundamentals of the economy.

There is only an enterprise of the times, and there is no eternal enterprise. There are only stocks of the times, and there are no stocks of eternity.

Because key factors such as economy and population have undergone qualitative changes, and most of the companies listed on the A-share market are affected by this, resulting in valuations that look high now, and will continue to be high in the future, making it impossible for the index to continue to rebound. Therefore, it is very normal for A-shares to continue to fall.

Eventually, it will fall to a reasonable position and then move sideways. At present, the risk aversion of funds is very strong. The previous pension stocks were all sold off because these stocks lost their future. Funds are either looking for high growth or high dividends. There will be no more requests for these dead stocks.

This is the root cause of the continuous decline of A-shares. Therefore, light the market, heavy stocks, can not carve a boat for a sword. This is the point I've been making lately, and it's an investment rule I'm putting into practice.

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