The memory chip market has now realized its potential. This article analyzes the impact of revenue and net profit growth on stock prices.
When selecting targets, we start from the industry perspective.
First, how to identify the industry.
By examining each financial report, we can identify the industry. We look at individual stocks in the memory chip sector. In fact, we previously overlooked one, Shannon Semiconductor. Let’s summarize these targets.
From companies like Zhaoyi Innovation, Jiangbo Long, Demingli, Shannon Semiconductor, and Haoshanghao, we temporarily set aside the Sci-Tech Innovation Board.
The industry leader, Zhaoyi Innovation, shows no significant growth in performance, but Jiangbo Long, Demingli, and Shannon Semiconductor have all demonstrated noticeable revenue growth.
As an agent, Haoshanghao, along with Shannon Semiconductor, has maintained a large scale in previous years without significant increases. However, Shannon Semiconductor’s revenue growth is also rapid. From the agent’s perspective, the growth in revenue scale has led to a clear choice.
Next, we look at the product side.
Jiangbo Long and Demingli. Jiangbo Long has a large base, so its growth rate isn’t as explosive, while Demingli’s smaller base makes its growth appear very fast. We cannot overlook Jiangbo Long’s revenue growth from last year.
Finally, regarding stock price increases, those with rapid revenue growth see larger price increases. Industry leaders will also follow suit with their earnings.
Demingli, Shannon Semiconductor, Jiangbo Long, and Zhaoyi Innovation have all seen good price increases. However, Haoshanghao has been subject to speculative trading. In contrast, when the entire sector rises, Haoshanghao’s performance has not been as strong.
How to choose an industry.
Revenue scales are continuously increasing, and this is not just a single company but a situation that occurs across large enterprises in the entire industry, which helps determine the industry.
Choosing targets means selecting those with fast growth rates. If that fails, go for the industry leader. The elasticity of industry leaders may be relatively smaller.
Finally, after selecting the industry, the question is when to enter the market.
Either during a significant market downturn or when market activity is high.
How to exit? Just use large wave segments to manage.
If some targets show very fast net profit growth or rapid revenue scale but underperform the market, what should be done?
In such cases, one can only hold firmly and wait for rotation.