China Special Stock is a type of special equity registered in Chinese mainland** and is part of the "Exploring the Establishment of a Valuation System with Chinese Characteristics" proposed by the China Securities Regulatory Commission in November 2022. The special rights and interests of China Special Stocks may include preferred shares, convertible bonds, options, etc., which can bring higher returns to investors, but also have certain risks. The issuance and trading of special shares can only be carried out in the ** market of Chinese mainland, which means that the investment opportunities and investment risks of special shares are closely related to the economic development of Chinese mainland.
The emergence of China Special Stocks is to better play the function of market resource allocation, better serve the real economy, and guide the reshaping of the valuation of companies with national strategic needs. The goal of the company is to improve the valuation level of China's superior assets, especially state-owned enterprises, central enterprises, private enterprises, etc., which are often undervalued under the traditional valuation system, to the detriment of national interests and market efficiency. The launch of China Special Shares is an innovation in line with national conditions, and it is a new historical opportunity for the valuation reconstruction of high-quality enterprises.
The investment value of China Special Stocks is mainly reflected in the following aspects:
High yield potential: Mid-to-private stocks often come with special interests that allow investors to achieve higher yields under certain circumstances. For example, preferred shares can give priority to the distribution of the company's profits, while convertible bonds can be converted into common shares under certain conditions, so as to enjoy the best returns.
Diversified investment opportunities: The emergence of the market provides investors with more investment opportunities and diversified asset allocation options. Different types of medium and special stocks have different special rights and risk characteristics, and investors can make reasonable allocations according to their own risk tolerance and investment objectives.
National policy support: The development of the special market has been supported and guided by national policies, which is conducive to improving the market recognition and liquidity of special stocks, and is also conducive to promoting the reform of state-owned enterprises and mixed ownership, and enhancing the vitality and efficiency of state-owned capital.
The investment risks of medium and special stocks are mainly reflected in the following aspects:
Market risk: There is a certain market risk in the market, and investors need to pay attention to the impact of changes in the market on investment. When investing in medium and special stocks, investors need to make a reasonable view of the market trend and formulate corresponding risk control strategies.
Special equity risk: Although the special interest of China Special Shares can bring higher returns to investors, there are also certain risks. For example, convertible bonds may be subject to the risk of share price when converted, while preferred shares may be subject to the risk of unstable dividends. Investors need to make reasonable allocations according to their own risk tolerance.
Liquidity risk: The liquidity of the market may be limited to a certain extent, especially in the case of a market recession or poor operating conditions of the company, there may be a risk that it may be difficult to realize. Investors need to pay attention to the liquidity of the market and choose medium and special stocks with good liquidity for investment.
In short, the special stock is a type with Chinese characteristics, both with high investment value, but also a certain investment risk, investors need to develop a reasonable investment strategy according to their own risk tolerance and investment objectives, and always pay attention to the changes in the market, so as to obtain the best investment returns.